news letter

Weekly newsletter

Hungarian Parliament Begins Debate On Government’s Budget 2018 Bill Proposal

By Tamás Székely // 2017.05.17.

Hungarian lawmakers are holding a parliamentary debate on next year’s budget bill. The general debate of the 2018 budget bill has started with addresses by the Economy Minister, the head of the State Audit Office and the head of the Fiscal Council, as well as the party groups.

Budapest, 2017. május 17. Varga Mihály nemzetgazdasági miniszter elõterjesztõi nyitóbeszédét tartja a 2018-as költségvetésrõl szóló törvényjavaslat tárgyalásán az Országgyûlés plenáris ülésén 2017. május 17-én. MTI Fotó: Szigetváry Zsolt

Next year’s budget bill targets 4.3 percent GDP growth aand a budget deficit of 2.4 percent, Economy Minister Mihály Varga said (photo: Zsolt Szigetváry – MTI)

Addressing lawmakers at the start of the budget debate on Wednesday morning, Economy Minister Mihály Varga said the 2018 bill focused on delivering predictability, security and developments. Varga noted that the bill contained an economic growth target of 4.3 percent and a budget deficit of 2.4 percent, alongside projected inflation of 3 percent. He added that the policy of reducing the public debt would continue and it was expected that the debt would fall to 70.5 percent of GDP, down by 1.5 of a percentage point from the current year.

At the same time, key public services are set to receive extra funding, he said. Education will receive 81 billion forints (EUR 262m) more than this year, while the health-care sector stands to get 102 billion extra. Pensions, family and social support will get an extra 287 billion forints and 205 billion will go towards economic developments, Varga said. Law and order institutions are set to receive an additional 83 billion, he added.

The 2018 budget bill is sound and will contribute to the country’s financial stability, the head of the State Audit Office (ÁSZ) said in the parliamentary debate of the bill. If the economy performs as expected, planned revenues can be achieved and in some cases surpassed, László Domokos said. At the same time, ÁSZ has identified risks of overspending of 107 billion forints (EUR 344.9m), he said. Domokos also gave warning of over-financing in the real estate market, and he called for considered and careful use of housing subsidies to avoid “creating a real estate bubble”. He also pointed to dangers connected with planned wage hikes in the public and private sectors as well as measures to boost consumption, which could stoke a rise in imports and lead to a deterioration in the country’s current account balance.

Árpad Kovács, head of the Fiscal Council (KT), said that planned revenues and expenditures accorded with the country’s economic performance so far and forecasts for 2018. The council sees risks on the income side in terms of VAT, personal income tax and social contributions, he said, adding that overall, however, planned revenues were realistic. The public debt can be kept within a manageable range even if the economic growth rate is slower than planned, he said. Moreover, it could fall to below 70 percent of GDP for the first time, complying with the stipulations of the constitution, Kovács said.

The budget bill is to be debated in nearly 10 hours on Wednesday, 14 hours on Thursday and four hours on Friday.

via MTI; featured photo: Zsolt Szigetváry – MTI