Hungary FinMin speaks about 2022 budget deficit and public debt

"Public debt has fallen more than expected, last year's deficit target has been met", Finance Minister Mihály Varga wrote on Facebook. "The budget deficit was as planned at 4.9% of GDP last year, and including the natural gas reserves it was 6.1%," Mihály Varga said. The Finance Minister said public debt fell more sharply than expected, with its ratio to gross domestic product improving to 73.5% from 2021's 76.8%.

Árpád Kovács, President of the Fiscal Council, wrote in an opinion piece: "The Stability Law's requirement for government debt-to-GDP ratio could be met by 2-3 percentage points more favorably than the macro-fiscal path, at around 74%,"

Árpád Kovács predicted that as a result of the EU-compliant accounting of the amount spent on filling gas storage facilities at the summer price peak, the accrual deficit, which was reduced to 4.9% during the year, is expected to be slightly higher than 6%.

In other words, Mihály Varga's announcement of a 6.1% deficit is in line with the Fiscal Council's analysis published recently.

"From a cash-flow perspective, the expenditure surpluses are likely to result in an overrun of around HUF 1,200 billion compared to the originally planned HUF 3,300 billion, which means a deficit close to 7% of GDP," Árpád Kovács wrote. Mihály Varga's post does not mention this figure for the time being.

The Hungarian Central Statistics Office (KSH) announced today that the government closed last year with a deficit of more than HUF 930 billion between July and September. This was 5.4% of GDP, significantly higher than in the first two quarters. Based on the above, the government ran a substantial deficit in the last quarter of the year.