There is no getting away from this economic crisis in the short term, warns Márton Nagy.Continue reading
The draft amendment to next year’s budget has been approved by the Fiscal Council, but they also warn of risks, such as the high energy prices, MTI reports.
In their decision on Tuesday, the Fiscal Council did not raise any objections to the draft amendments to the budget.
However, they pointed out that
Russia’s war against Ukraine, the sanctions imposed in response, the sharp rise in energy prices, and the related uncertainty in the external economic environment pose risks to the fulfillment of the budget targets.
The draft regulation projects economic growth of 1.5 percent in 2023, compared to the 4.1 percent initially assumed, due to the lingering effects of the war and the energy crisis, the slowdown in global growth, and the impact of inflation on real incomes.
Thanks mainly to high nominal GDP growth of almost 16.6 percent,
the debt ratio will continue to decline in 2023, from 74 percent at end-2022 to 70.2 percent at end-2023,
Napi.hu points out.
According to the economic portal Portfolio, the most important and perhaps most interesting part of the document – especially for investors and credit rating agencies, as well as for the credibility of fiscal policy – is
the increase of the deficit target from the originally planned 3.5 percent to 3.9 percent.
It continues to ensure the implementation of the main social policy objectives set out in the original budget, such as maintaining the reduction in rationing up to average consumption, supporting families, protecting the elderly, and strengthening national defense capabilities. It also creates the possibility to increase pensions in line with higher inflation than initially projected, to partially compensate for the increased energy costs of public institutions, and to finance higher interest expenditure on public debt.
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