Hungary's Q1 GDP Deficit: 9.8%

According to preliminary data, the deficit of the general government sector in Hungary in the 1st quarter of 2023 was HUF 1,728 billion, 9.8% of GDP, the Central Statistical Office reports.

The balance deteriorated by HUF 1,265 billion, or by 6.8 percentage points as a proportion of the GDP, compared to the same period of the previous year.

In the 1st quarter of 2023:
The general government sector’s revenue was HUF 7,210 billion and its expenditure HUF 8,938 billion.

In the 1st quarter of 2023, compared to the same period of 2022:
Revenues went up by HUF 607 billion or by 9.2%. The largest, HUF 415 billion (15.6%) increase in value was recorded in taxes on production, primarily due to the special taxes introduced during 2022. VAT revenue growth was HUF 129 billion (8.8%). Revenues from taxes on income were HUF 169 billion (16.4%) higher than a year earlier. Social contributions increased by HUF 186 billion (by 11.9%). Other revenues decreased by HUF 164 billion (by 12.2%).

Expenditures increased by HUF 1,872 billion or by 26.5%. The reduction in case of paid compensation of employees was HUF 151 billion (8.2%), being impacted by the payment of the six-month ‘firearms money’ in the base period as well. Social benefits other than social transfers in kind rose by HUF 436 billion (by 23.4%), owing mainly to increased amounts of paid out pension benefits. Intermediate consumption surpassed by HUF 153 billion (by 13.6%) the previous year’s value, interest expenditures grew by HUF 395 billion (by 113%). Gross fixed capital formation decreased by HUF 46 billion (by 9.8%). Other general government sector expenditures went up by HUF 1,085 billion (by 77.3%) year-on-year, mainly due to a sharp increase in subsidies for energy supplier companies.