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Budget Running Out of Unemployment Funds as Effect of Coronavirus

Róbert Panyi 2020.07.28.

After having spent 83.2% of the provisional annual sum of unemployment benefits in less than half a year, the government needs to find extra funds to provide the rest for 2020. The remaining sum would only cover one additional month of unemployment benefits.

A recent report by mfor.hu found that the government has already spent 83.2% of the provisional annual sum allocated for unemployment benefits. This means that in total, since the beginning of 2020, HUF 69 billion (EUR 200 million) has been spent to cover the unemployment benefits of an increasing number of citizens who have lost their jobs. In June alone, the benefits cost the government HUF 29.4 billion, the highest amount spent in a single month since 2006.

Finance Minister: GDP Expected to Fall 5 Percent in 2020
Finance Minister: GDP Expected to Fall 5 Percent in 2020

Hungary’s GDP is expected to fall 5 percent in 2020, Finance Minister Mihaly Varga told public Kossuth Radio on Thursday. The economy strengthened somewhat in June, but GDP in the second quarter is still expected to fall by 10 percent annually, Varga said. The economy suffered a 20 percent setback in April in annual comparison, […]Continue reading

The financial difficulties are the result of the rising number of those unemployed. According to official statistics, from March 2020, more than 112,000 people have lost their jobs in Hungary – and the number is still rising. The actual number of people having lost their livelihood may be even higher, since a considerable minority of those impacted may not have filed for unemployment benefits.

Although an expected deficit of such a great magnitude would normally require the official modification of the provisional budget, the current provisions are only estimates, and there is no upper limit on additional unexpected costs. Hence, the budget remains unchanged.

Featured photo by Zsolt Szigetváry/MTI