Plugging budget hole main gov’t concern, says Varga

Banking

The most important task ahead of the government this year is to “plug a hole” of HUF 80-100 billion (€290-366 million) in the budget due to economic growth underperforming the target, the state secretary of the Prime Minister’s office told a TV program on Sunday evening.

Mihály Varga told commercial news channel HírTV that economic growth this year was expected be 2% or lower. He said plugging the hole would not be a simple task, requiring 8 to 10 small reductions in the ranges of HUF 10-20 billion to help keep the budget deficit below 3%, but pension assets transferred to the state would not be used to serve this goal.

Varga said revenues from such areas as value-added tax had been lower than expected, adding that the new flat income tax introduced from this year had not lifted consumption by Hungarian households, many of which are plowing income into repaying skyrocketing mortgages denominated in foreign currency, or to make further savings.

The government will have to pay VAT refunds to enterprises after a July ruling of the European Court of Justice. Varga said initial estimates of this cost to the budget ranged between HUF 240-260 billion.

Concerning a possible reshuffle of government, the state secretary said minor changes were conceivable.

ADVERTISEMENT

COVID changes workplace preferences of office workers Analysis

COVID changes workplace preferences of office workers

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Dentons rehires banking and finance partner Appointments

Dentons rehires banking and finance partner

Budapest hosting 2024 Chess Olympiad City

Budapest hosting 2024 Chess Olympiad

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.