The economy may suffer nearly three times the originally planned average annual rate of monetary deterioration of 5%

By: Trademagazin Date: 2022. 08. 31. 12:58

Inflation in Hungary exceeds all previous expectations. After the publication of the latest July inflation data, analysts revised their inflation expectations upward, and it is possible that the Hungarian economy may suffer nearly three times the annual average rate of monetary deterioration originally planned by the government of 5%.

The tax increases were good for the government

As a result, the state budget can rub its palms, as traffic-type revenues just flow into the budget partly due to higher prices: in the seventh month of this year alone, the budget absorbed HUF 723 billion in VAT revenue.

The announcement of the Ministry of Finance two weeks ago revealed that there was a turnaround in the main figures of the budget in July: the central subsystem of the public finances achieved a surplus of HUF 255.7 billion. According to our information, such a surplus in the seventh month of the year has never been seen before.

In connection with the recent, preliminary monthly public finance data, we also pointed out that the effects on the revenue side, including the tax increases that came into effect on July 1st, play a role in the much better budget balance than before.

Read full article here.