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The government will gradually reduce the budget deficit and public debt in the coming years, while the Hungarian economy is set to achieve one of the highest growth rates in the European Union, according to the Convergence Program sent by the Ministry of Finance to the European Commission on Tuesday.
The Ministry of Finance said in a statement that the forecast shows rising employment, improving unemployment, rising wages, and falling inflation in the coming years.
They pointed out that the period since the release of the 2023 Convergence Program has been characterized by the containment of inflation and the restoration of external balance. Despite the unfavorable external environment, the fundamentals underpinning economic growth are strengthening, the document emphasized, noting that real wages have been rising steadily since September 2023, supporting household consumption and economic growth.
The program forecasts growth of 2.5 percent in 2024, and 4.1 percent in 2025, after which the Hungarian economy is expected to expand at an annual rate of around four percent.
This is in line with European Commission and IMF forecasts that Hungary could be among the top performers in the EU growth ranking next year. In line with the government’s targets, the recovery in the economy should further boost demand for labor, therefore the number of people in employment should remain above 4.7 million.
The statement stressed that the government is also rebuilding economic growth by strengthening the balance, reducing the public deficit to 4.5 percent this year and to 3.7 percent next year, and 2.9 percent in 2026. In addition, the public debt ratio could fall from 73.5 percent at the end of 2023, to below 70 percent in 2026.
The government is committed to maintaining the deficit target, so it is continuously monitoring the budget and has made decisions to this end.
The government has rescheduled HUF 675 billion (EUR 1.7 billion) of public investment to meet the deficit target, while HUF 2,000 billion (EUR 5 billion) of development will be implemented this year.
The resumption of growth and the moderation of inflation will also help to strengthen the budgetary position. Meanwhile, as in previous years, supporting families and pensioners, and maintaining the protection of public finances will remain a priority, the Convergence Program underlined.
Hungary’s 2024-2028 Convergence Program is available on the kormany.hu website.
Via MTI; Featured image via Facebook/Mercedes-Benz Gyár Kecskemét