The council said the assumption for 4.1% GDP growth is "achievable" if the pandemic doesn't return, the impact of the war in Ukraine remains "in the range" assumed when the budget was drafted, and a further deterioration of the trade balance can be avoided.
The experts delivered a positive assessment of government measures to raise revenue by "adjusting taxes to the ability to share the burden", while not raising taxes on households or labor, but it said that carrying out expenditure side measures are "indispensable" for the "credible and well-established implementation of stabilization". It added that expenditure side steps should be detailed and put into force "as quickly as possible".
The council said the government's move to reduce the accrual-based ESA deficit to 3.5% and the cash flow-based deficit to 3.3% of GDP is "appropriate", while the target is "achievable" as long as macroeconomic assumptions turn out, and planned tax changes and spending cuts are implemented.
The council urged the deficit to be reduced to the 3% threshold "as soon as possible, if the economic circumstances allow".
It also recommended stricter conditions for pre-financing for projects that win Cohesion Fund and rural development support from the European Union during the 2021-2027 funding period, and suggested reducing the volume of pre-financing for periods over a year by encouraging borrowing. The resources thus freed up could be used to boost fiscal reserves, it said.
The Ccuncil noted that the budget draft calculates with expenditures related to EU developments of HUF 3.408 trillion in 2023, while transfers from Brussels are set to reach HUF 2.057 tln.
The Fiscal Council is charged with weighing in on budget matters. It is chaired by Árpád Kovacs and its members are central bank governor György Matolcsy and State Audit Office head László Domokos
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