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The draft targets a general government deficit of 4.9% of GDP, with economic growth projected at 2.4%.
Speaking at a joint press conference with Prime Minister Péter Magyar, Kármán highlighted a reduction in the personal income tax (PIT) rate for minimum wage earners to 9%, leaving them with an additional HUF 20,000 a month. The budget also earmarks HUF 677 bln for public sector wage increases.
Other measures include raising the minimum pension to HUF 120,000 a month, doubling family allowances, increasing healthcare spending by HUF 510 bln and adding HUF 734 bln to social services expenditure.
Kármán said a new wealth tax and higher taxation of large companies would create a “fairer distribution of the public burden.” Changes to the itemized tax for sole proprietors, known as KATA, would establish a predictable business environment, he added.
The PIT exemption for mothers will be capped at gross monthly earnings of HUF 1 mln. Mothers with one child will qualify until age 30 and those with two children until age 40, while mothers with three or more children will face no age restriction.
Doubling family allowances will leave households raising two children with an additional HUF 319,200 annually. The measure will cover 1.6 million children and cost the budget around HUF 300 bln.
Additional pension spending, excluding the usual inflation-linked increase, will total HUF 368 bln. This includes HUF 155 bln for the first week of the 14th-month pension, HUF 123 bln for raising the minimum pension and HUF 90 bln for introducing SZÉP voucher cards for pensioners.
Kármán outlined HUF 1.465 tln in savings, including HUF 1.018 tln from reversing measures adopted by the previous government, such as canceling overpriced concessions and inefficient support contracts.
A further HUF 447 bln would come from spending reductions of at least 10% at ministries and state-owned companies.
Tax changes intended to redistribute the public burden would generate HUF 579 bln in additional revenue, while closing loopholes would bring in HUF 113 bln. Health-related taxes, including tobacco excise duties, the public health product tax and taxes on spirits, would yield an additional HUF 158 bln. Environmental taxes would generate HUF 79 bln more.
PIT changes and lower VAT rates on firewood and prescription medicines would reduce revenue by HUF 264 bln.
Magyar said measures affecting large companies would raise their effective tax rate to around 11%. He argued that the former Fidesz-KDNP government had favored multinational companies and foreign-owned banks despite its public messaging.
Interest expenditure is expected to decline to 3.8% of GDP in 2027 from 3.9% in 2026.
Kármán said HUF 1.616 tln in investments supported by EU funding secured by the government would help restart growth after four years of stagnation.
He highlighted EUR 16.4 bln in EU development funding, which would support transport infrastructure, SMEs, education and healthcare. Railway developments would receive HUF 331 bln in 2027 under the 10-year Baross Gábor Railway Development Plan.
State contracts would be awarded through open tenders offering a level playing field, Kármán said.
Municipal councils would receive an additional HUF 176 bln in support, including HUF 84 bln for Budapest, mainly for public transport.
Kármán also defended plans to roll back mandatory markup caps on selected food and non-food products, calling them a market distortion. He said local farmers, SMEs and other market participants had requested their removal, adding that food prices had fallen 1.3% over the preceding 12 months.
The government projects GDP growth of around 1.7% in 2026, accelerating to 2.4% in 2027, 2.6% in 2028, 3% in 2029 and 3.1% in 2030.
The deficit is expected to narrow from 4.9% of GDP in 2027 to 4% in 2028, 3.4% in 2029 and 2.8% in 2030.
Magyar said the budget would improve the position of “practically every Hungarian,” while acknowledging that the government could not resolve all the economic policy problems inherited from its predecessor within one year.
He said there was no formal hiring freeze at ministries, although attrition was helping contain payroll costs. He also criticized what he described as “unbelievably high” average salaries at some state-owned companies.
The draft budget was due to be sent to the Fiscal Council on Tuesday and submitted to Parliament at the end of October.
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