The council warned that ongoing geopolitical tensions and rising trade conflicts pose downside risks, although planned fiscal stimulus in several European Union countries, including Germany, may support Hungary’s prospects.
The 2026 budget bill forecasts 4.1% economic growth, but the council noted that current conditions could negatively impact performance in the 2025 base year. It stressed the importance of reducing the general government sector deficit below 3% to move toward budget balance.
While acknowledging the 3.7% of GDP accrual-based deficit target for 2026, the council cautioned that if economic growth underperforms, tax revenues could also fall short, recommending a significantly higher reserve than the currently planned HUF 50 bln for extraordinary measures.
The council stated that the government’s debt ratio target of 72.3% of GDP could be met under assumptions of 4.1% real GDP growth, a 4.4% of GDP cash flow-based deficit, and a 3.7% of GDP ESA deficit, but warned that weaker economic performance could complicate meeting these goals.
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