Hungarian government ready to make budget corrections if necessary - EcoMin

Economy Minister Márton Nagy attended the extended Eurogroup meeting in Brussels on Monday and the ECOFIN Council meeting on Tuesday.

He stressed that budgetary stability is a top priority, and the government will maintain this stability while implementing tax cuts for families and pensioners in 2025 and 2026.

Although 16 EU Member States, including Hungary, requested the activation of the emergency clause, which will affect national budgets' room for manoeuvre in the future, Nagy stressed that fiscal sustainability must still be maintained.

Addressing current budget developments, Nagy pointed out that in the first four months of 2025, the budget deficit reached 71% of the annual target, which is similar to previous years. He explained that the front-loaded nature of the annual deficit is largely due to retail government bond interest payments made in the first months of the year, the 13 month's pension paid in February, and the higher-than-proportional amount of compensation paid to suppliers for retail energy subsidies.

The minister stated that Hungary's financial position remains stable, and despite lower-than-expected economic growth, budget revenues have increased significantly as expected, partly due to growing consumption.

The government previously adjusted its budget deficit target to 4.1% of GDP, and considering this,

the pro rata deficit shows a lower level compared to the previous year,

Nagy noted.

He stressed that the Hungarian government is actively analysing budgetary processes and

will make corrections on the expenditure side if necessary.

Nagy also stated that the basic rule in budget planning is to maintain a zero primary balance, i.e. the deficit calculated without interest payments. He underlined that the government will reduce interest payments, the budget deficit and public debt in the coming years.

Cover photo: MTI Photo/Szilárd Koszticsák