Finance Minister Mihaly Varga (Photo: MTI / Tibor Illyés)

Budget deficit 8.1 pc of GDP in 2020

Hungary's budget ran a 3,870 billion forint (EUR 10.7bn) deficit last year, equivalent to 8.1 percent of GDP, data released by the Central Statistical Office (KSH) on Thursday show.

The deficit swelled because of the economic impact of the pandemic as well as government stimulus and spending on Covid-19 defence.

KSH noted that Hungary’s public debt as a percentage of GDP reached 80.4 percent at the end of 2020, citing data compiled by the National Bank of Hungary (NBH). In absolute terms, public debt stood at 38,408 billion forints.

Budget revenue rose by 0.2 percent to 20,775 billion forints for the year. Expenditures were up 13.4 percent at 24,644 billion.

The budget deficit came to 2,276 billion forints in the fourth quarter, equivalent to 18.1 percent of GDP.

Commenting on the data, the finance ministry said Hungary’s public debt was lower than the European Union average of over 90 percent of GDP. Meanwhile, the 8.1 percent budget deficit is expected to be around the EU average, the ministry said in a statement.

Last year’s budget provided ample resources for the government’s pandemic response and economic protection measures, including the purchase of protective equipment and the financing of infrastructure developments, it added.

The ministry also noted the one-time 500,000 forint bonus paid out to health-care workers and the government’s funding of the family protection action plan as well as the Modern Cities and Villages scheme.

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