The outlook for Hungary is expected to improve, with stronger economic growth and a declining budget deficit.Continue reading
The 2025 budget can be a budget of new opportunities, new economic policy, and peace, Finance Minister Mihály Varga said at the ceremonial presentation of the 2025 budget draft in parliament on Monday.
The politician noted that the post-epidemic period, the war, and the uncertain international environment required changes in the budget compared to previous years, which is why it was submitted later. Despite this, the outlook is encouraging, with a good chance that the world will move towards peace following the outcome of the U.S. elections, he added.
The minister stressed that economic growth has started this year, and the Hungarian economy’s performance will increase in 2024, with a pick-up in consumption as wages rise.
Based on the forecasts of international institutions, the Hungarian economy is expected to be among the best performers in the EU in 2025,
he highlighted.
He said that the government has set clear goals: to put the economy back on a growth path, to raise wages, to support families and to strengthen SMEs.
Mihály Varga highlighted five elements of the plan:
This year’s budget was a budget of defense, the 2025 budget can be a budget of new opportunities, a budget of new economic policy, a budget of peace,”
he pointed out. With fiscal discipline, deficit reduction will continue, with a deficit target of 3.7%. The budget is based on GDP growth of 3.4% and inflation of 3.2%. Gross interest expenditure is projected at 3.8% of GDP in 2025. The Fiscal Council has agreed with next year’s budget and all the conditions are in place to comply with the Fundamental Law.
The minister explained that most areas were expected to have increasing items in real terms. Defense spending will reach 2% of GDP, according to the NATO commitment, thus spending is expected to reach HUF 1,753 billion (EUR 4.2 billion, EUR 1 = HUF 410). In 2010, HUF 225 billion were available, which means an increase of 3.5 times in real terms. Border protection spending has reached HUF 800 billion since 2015, with a further HUF 40 billion increase next year. Law enforcement spending will rise to HUF 1,396 billion next year.
He emphasized that
HUF 3,574 billion will be earmarked for family support, HUF 447 billion more than this year, maintaining Europe’s broadest family support.
Families’ room for maneuver will also be helped by other measures, worth HUF 880 billion.
One of the biggest items is pensions, with pension benefits rising to HUF 7,200 billion and the payment of the 13th month pension guaranteed.
The education area will receive an increased allocation of HUF 3,876 billion, with an increase of almost HUF 500 billion, while the healthcare sector will receive HUF 3,717 billion.
On special taxes, he said that their phasing-out will continue, with taxes on airlines, pharmaceuticals, and telecoms to be abolished from January. The advertisement tax will also be suspended for another year. The reserves will amount to HUF 100 billion.
The Hungarian budget has made significant progress compared to 2010, with several times more resources available in real terms,
the finance minister highlighted.
János Latorcai, Vice president of the National Assembly, said that the proposal will be debated in parliament on November 27-28, and 29th in a 30-hour timeframe, with the deadline for amendments at 4 p.m. on November 28. Following the committee debates, the final vote on the 2025 budget will be held on December 20, which is expected to be the last day of the session this year.
Via MTI; Featured image via MTI/Bruzák Noémi