Finance Ministry reported 11% worse than expected 1Q05 budget deficit of (HUF -789bn or 51% of the annual target) than the consensus of HUF -710bn (or 46%), polled by Bloomberg. The figure also exceeded the Finance Ministry’s 1Q05 budget deficit guidance of: 45.1% of the annual target.
According to the Ministry, accelerated rate of fund allocation for EU programs and earlier than planned personal income tax returns were accountable for the worse than expected March data, however none of them is seen to endanger the fulfillment of the annual budget deficit target. The Ministry stressed, that fund allocation for EU programs should cause only temporary gap, as the national budget advances the funds to be paid to successful subsidy applicants, and receives the same amount later from the central EU budget. They also stated, that personal income tax returns showed up earlier on the budget this year, which were planned to due only in the next two months.
Still, we see the news as slightly negative.