Hungarian finance minister: Previously blocked EU funds continue to arrive

Hungary’s government is committed to restoring balance to the central budget as soon as possible as well as to keeping the deficit as small as possible and the public debt on a downward path, Finance Minister Mihály Varga said in Brussels on Tuesday.

Economic growth depends greatly on when the war between Russia and Ukraine ends, Varga told Hungarian journalists after an Ecofin meeting.

Though inflation was brought down at a quicker rate, this was not coupled with economic growth, the minister said. The economies are stagnating, he said, adding it was “no accident” that the European Commission has lowered this year’s growth forecast for the bloc to 0.9 percent from 1.3 percent. Hungary’s economic outlook, however, was positive, he said, citing the EC’s 2024 GDP growth forecast of 2.4 percent for this year and 3.6 percent for 2025.

Despite the blocked EU funds, Hungary’s economic output exceeds pre-pandemic levels by 5 percent compared with the EU average of 3.5 percent, Varga said.

He said the Hungarian government was committed to restoring balance to the central budget as soon as possible as well as to keeping the deficit as small as possible and the public debt on a downward path.

Hungary’s public debt shrunk at the end of last year compared with the end of 2022, he said, adding that the debt was back on the downward trajectory seen between 2010 and 2019. Hungary targets a budget deficit of 4.5 percent of GDP in 2024, he added.

Concerning the EU’s Resilience and Recovery Facility (RRF), Varga said that “after two years of political stalling,” Hungary has received 550 billion forints worth of funds that had been previously blocked since December.

Meanwhile, he said the finance ministers, along with members of the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO), had assessed the role of social investments. Varga noted that Hungary had earmarked an annual 3,300 billion forints (EUR 8.4bn) for one of the broadest reaching family subsidy systems in the EU.

He said Ecofin had backed the extension of the mandate of IMF Managing Director Kristalina Georgieva.

As we wrote today, panic set in, and Hungarian forint plunged to a one-year low; details HERE.

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