In October, the budget was punctured like never before

The main objective of the government during the second wave of the epidemic is to protect human life and maintain the viability of the economy. Therefore, the central budget continues to provide all the necessary resources for health protection and economic protection measures. As a result of defense spending and subsidies to the economy, as well as pre-financing of EU developments, the budget deficit increased to HUF 2.604 billion at the end of October, according to the prime minister’s statement.

This also means that in October, according to our collection, the deficit has increased to a level never seen before.

The Prime Minister notes that “in October 2020, the central subsystem closed with a deficit of HUF 333.9 billion, which is HUF 62.1 billion more than the previous year.” It also revealed that in October 2020, the budget received 88 billion HUF in EU revenue.

What has happened so far this year?

The accumulated deficit amounted to more than 2.6 billion HUF at the end of October, mainly due to the expenses of the Economic Protection Fund, epidemiological expenses and the decrease in tax revenues due to the economic recession. In such an economic crisis, such a run of deficit is by no means extraordinary.

Compared to the new annual deficit appropriation of HUF 3.6 billion, 72% of the deficit target was reached in the first ten months of the year. On the contrary, this also means that a deficit of HUF 1 billion may emerge in the last two months of the year, if the HUF 3.6 billion plan in force since September can still be maintained.

However, since the new austerity measures announced on Tuesday due to the epidemic are also not expected to benefit the economy, this year’s GDP forecast for the government could be overwritten. this could have an impact on the budget balance this year. In addition, government measures to support hospitality will have budgetary implications, which will also worsen this year’s balance.

The portfolio details the first ten-month processes. According to these:

• EU funds balance: Revenues for the 10 months of 2020 amounted to 997.4 billion HUF, however, in this period EU expenditures exceeded 1.642 billion HUF.
• At the end of October, purchases of medical devices related to the coronavirus epidemic amounted to 593.3 billion HUF.
• Among internal expenditures, in the first 10 months of the year, funds spent in support of improving competitiveness (165 billion HUF) and on priority road projects (200.2 billion HUF) became necessary as a result of the coronavirus epidemic .
• The funds paid out of the allocation for tourism development objectives (HUF 196.3 billion) and for the maintenance and operation of the road network (HUF 84.7 billion) appear as significant expenses.
• Also important are payments from the Rural Roads Fund (82 billion HUF), the allocation of investment incentives (53.5 billion HUF), the renewal of the road network (37.4 billion HUF) and the Modern Cities Program (35.9 billion HUF). quantities.
• The budget also spent a significant amount in support of car purchases for large families (HUF 33.6 billion) and in support of the sub-programs of the Hungarian Villages Program (HUF 34 billion).