As expected,
in October, the deficit of the central subsystem of public finances exceeded three thousand billion forints,
a year ago at this time, we were at minus HUF 3,487.6 billion. In one month, we created a deficit of more than HUF 426 billion, the reason for which was the brutal expenditure in October, which exceeded HUF 3,732 billion.
Interestingly,
in October, the state spent more on interest expenses (HUF 586.9 billion) than, for example, on retirement benefits (HUF 481.8 billion) or the entire health insurance fund (HUF 357.2 billion).
But from the point of view of next year’s draft budget, it doesn’t matter what the revenue side looks like. VAT is expected to account for 22.4 percent of this year’s total state budget revenue, which means that
virtually every fifth HUF depends on how much sour cream, buns or electric cars we buy in stores.
Nevertheless, by the end of October, our VAT-heavy budget received HUF 2,400 billion less VAT than the annual appropriation.
Exactly 6,174.6 billion forints were received, and the annual appropriation is 8,574 billion forints, which is a 72 percent performance, so in two months, almost exactly two thousand four hundred billion forints should be collected from VAT.
Last year we managed to estimate better, at the end of October 82.8 percent of the appropriation was realized, HUF 5,778.7 billion, and the end was HUF 6,981.9 billion, and since the statutory appropriation was HUF 7,985.9 billion, the 87.4 percent fulfillment was almost caused a trillion dollar deficit in the public finances.
However, there is also a worrying sign that casts an ominous shadow over next year’s budget.
Image: Economx.hu
The opinion of the Budget Council at the beginning of November revealed that the 2025 VAT appropriation will be 617.4 billion more than this year’s expected VAT revenue. Based on this, HUF 7,659.8 billion is expected this year, and since the forecast for 2024 was HUF 8,574 billion, we can expect that
the missing VAT revenue will leave a HUF 914.2 billion hole in the public finances.
The problem is that from the end of October to the end of December, the Hungarians would have to buy HUF 1,500 billion for the modified goal.
In the last five years, there has been no case where the general sales tax (VAT) appropriation has been lower than the figure forecast for the previous year. At the same time, in response to Economx’s request, the Ministry of Finance previously stated,
revenues from general sales tax next year may exceed the amount currently expected for this year.
According to the ministry, this is indicated by the persistent increase in earnings and the recurring, expanding consumption, which also carry the growth of the economy. The appropriation of sales tax revenues is therefore also in line with the macroeconomic expectations of the budget – the Ministry of Finance responded to our inquiry.
Of course, we have also contacted the Ministry of Finance as soon as they respond regarding the expected VAT revenue, we will inform Economx.
Source: www.economx.hu
