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The government’s 2021 budget bill targets annual economic growth of 4.8 percent, Finance Minister Mihály Varga said, presenting the bill to parliament on Tuesday.

Inflation is expected to be around 3 percent, level with the National Bank of Hungary’s mid-term “price stability” target, he added.

The 2021 budget will serve to protect the economy while catering for a possible recurrence of the coronavirus epidemic, Varga said.

Next year’s budget will focus on supporting families while restarting the economy and helping to create jobs to make up for the ones lost due to the epidemic, he said.

The bill targets expenditures of 23,373.6 billion forints (EUR 66.6bn) and revenue of 21,882.4 billion forints, resulting in a 1,491.2 billion forint deficit.

Calculated according to the European Union’s accrual-based accounting rules, the deficit will come to 2.9 percent of GDP.

The bill targets a decline in the public debt to 69.3 percent of GDP by the end of the year from an expected 72.6 percent at the end of 2020.

In response to a question, he said a euro exchange rate of 356 to the forint is the basis for next year’s budget calculations.

The bill sets asides reserves equivalent to more than 0.5 percent of GDP.

Local government budgets will be increased to a total of 857 billion forints from 739 billion in 2020. Funding will be increased for local government public education spending to 213 billion forints, while spending on culture and social services will rise to 82 billion forints and 174 billion respectively.

The draft budget allocates 2,229 billion forints to education, 80 billion more than last year. The health-care sector receives 2,145 billion, 186 billion more than in 2019, he said.

The bill allocates 2,295 billion forints to support families raising children, Varga said, noting that that sum has grown 2.5 times of what it was in 2010.

Pensions and other retirement payments will rise by 325 billion forints to 3,090 billion, he said.

Defence spending is being raised by 30 percent to 778 billion, he said.

The budget bill contains an independent chapter for a Health and Pandemic Defense Fund, with expenditures of 2,935.0 billion forints.

It also contains an independent chapter for an Economic Defence Fund with expenditures of 2,555 billion forints.

Political parties will have a total of 5.78 billion forints allocated, the equivalent of this year’s funding before it was slashed by half due to the coronavirus epidemic.

Of the parliamentary parties, ruling Fidesz will receive 968 million forints, Jobbik 510 million, the Socialists 305.5 million, LMP 218 million, the Democratic Coalition 207 million, the junior ruling Christian Democrats 180 million and the Párbeszéd party 91 million forints.

House Speaker László Kövér said parliament will debate the draft on June 29, with a vote possible on July 3 or 6.

In the featured photo illustration: Finance Minister Mihály Varga with the 2019 budget bill. Photo by Zsolt Szigetváry/MTI