Hungary - Public finance



In recent years, the government has presented its budget bill to the National Assembly sometime during the first several months of the year, but the budget itself becomes effective on 1 January, when the fiscal year begins. It is prepared by the Ministry of Finance. Although Hungary had one of the most liberal economic regimes of the former Eastern bloc countries, its economy still suffered the growing pains of any country trying to come out of communism and privatize its industries. The last few years, however, Hungary has enjoyed a remarkable expansion, averaging annual GDP growth of 4.5% between 1996 and 2002. Inflation in that period dropped from 28% to 7%, and unemployment fell to 6%, less than most EU countries. Eighty percent of GDP is now produced by privately-owned companies. Still, Hungary's foreign debts remain large, putting a damper on the economy's otherwise spectacular performance.

The US Central Intelligence Agency (CIA) estimates that in 2000 Hungary's central government took in revenues of approximately $13 billion and had expenditures of $14.4 billion. Overall, the government registered a deficit of approximately $1.4 billion. External debt totaled $31.5 billion.

The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.

Hungary

REVENUE AND GRANTS 100.0% 13,000
Tax revenue 88.4% 11,492
Non-tax revenue 10.6% 1,383
Capital revenue 0.6% 72
Grants 0.4% 53
EXPENDITURES 100.0% 14,400
General public services 7.3% 1,056
Defense 2.7% 389
Public order and safety 3.8% 540
Education 4.8% 698
Health 6.1% 876
Social security 32.2% 4,642
Housing and community amenities 1.5% 223
Recreation, cultural, and religious affairs 1.9% 271
Economic affairs and services 13.6% 1,955
Other expenditures 11.1% 1,601
Interest payments 14.9% 2,148
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