"Raising the target is justified on the basis of both cash flow-based and accrual-based data" and "reflects economic and fiscal trends," the council said. In addition to raising the deficit target, the council said it deemed "tight control of expenditures" necessary. Hungary's year-end state debt ratio could fall despite lower-than-targeted GDP growth and the bigger budget gap, the Fiscal Council added.
Earlier on Tuesday, the Ministry of Finance said the 2023 deficit target had been raised from 3.9% to 5.2% of GDP "in view of significantly increased expenditures."
The ministry pointed to the impact of the protracted war in Ukraine and Brussels' sanctions policies on the unfavorable state of the global economy and the energy crisis but said the budget would ensure that the value of pensions was preserved and family subsidies, as well as regulated utility prices for households, were maintained, even amid the extraordinary expenditures.
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