The Finance Ministry said on Thursday it raised its 2010 cash flow-based budget deficit target to HUF 878.9bn from HUF 870.3bn, but the new target is still equivalent to 3.3pc of GDP.
The ministry raised the target on the expenditure side by HUF 185.4bn to HUF 8,951bn, but lowered projected spending on interest by HUF 46.3bn to HUF 1,107bn. The revenue target was lowered from HUF 609bn to HUF 546bn. (Revenue was HUF 385.5bn in 2009, but the corporate tax base was changed in 2010.) The VAT revenue target was lowered by about HUF 17bn and the target for personal income tax revenue was knocked down by HUF 45bn.
The spending target for social security was lowered HUF 9bn, and the revenue projection dropped HUF 19bn.
Hungary’s general government had a surplus of HUF 31.3bn in January.
The first-quarter deficit, excluding local councils, is expected to reach HUF 651.3bn, 2.5pc of GDP, in line with the earlier projection.
The Finance Ministry wants to replace HUF 49bn in lost budget revenue because of a Supreme Court decision to scrap a tax on homes from reserves, state secretary Tamas Katona said. The new projection lowers stability and interest rate reserves from HUF 148.6bn to HUF 99.6bn.
January budget data did not contain some HUF 20bn in support for state-owned railway company MAV, thus it will show up in February, Mr Katona said. This will not affect support for the company in February, he added.
Eligible private pension members who opted to rejoin the state pension system added HUF 26bn to the budget in December and HUF 27bn in January.