Gov't to Stick to 2023 Deficit Target - Varga

Analysis

Mihály Varga

Image by Alexandros Michailidis / Shutterstock.com

The government will maintain the 3.5%-of-GDP deficit target in the 2023 budget act, Finance Minister Mihály Varga said at a press conference on Tuesday, according to a report by state news wire MTI.

Hungary's fiscal financing position is stable and the resources necessary for the secure operation of the country are available, Varga said.

In spite of the unfavorable international environment, the government will continue to reduce the deficit and state debt relative to GDP, he added.

The 2023 budget act, approved by lawmakers in July, assumed GDP growth of 4.1% and 5.2% average annual inflation.

Varga confirmed the government has started redrafting the 2023 budget, to reflect the "changed economic conditions", and will make amendments to the act by the end of December.

The plan is for Hungary's economy to avoid recession and grow 1.5% next year, he said.

He noted that energy prices have risen by a factor of 10-15 and budget expenditures on energy have climbed by HUF 4 trillion.

He said Hungary's record level of employment and low jobless rate, its over-the-EU-average growth rate, its internationally competitive tax system, its high level of investment, and government decisions taken mid-year to preserve balance indicators, all point to the country's stability.

He added that Hungary's financing would be helped the year-end approval of the country's Recovery and Resilience Facility (RRF) and an agreement with the European Union on its Cohesion Funding.

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