Here is why and how the government modified the 2023 state budget

The budget amendment which contains measures to protect capped energy bills has been presented to parliament, the finance ministry said on Thursday.

… This year, the government is also keeping caps on energy bills up the level of average consumption while reducing the public debt and the budget deficit,” the ministry said in a statement. Given the emergency situation, the government has amended the 2023 budget by government decree, bearing in mind guidelines already adopted by parliament and the backing of the Fiscal Council, and it has submitted the relevant bill to parliament, with a new revenue target of 36,358.4 billion forints (EUR 91bn), up from 31,073.7 billion, and a spending target of 39,758.6 billion, up from 33,425.8 billion.

The deficit is set to widen to 3,400.2 billion forints from 2,352.1 billion, while the public debt is targeted at 69.7 percent of GDP, down from an estimated 73.5 percent in 2022. The fund for protecting capped energy prices is set at 2,610 billion forints, up from 670 billion in the original law passed last July. Central budget support for the fund is set at 1,198.3 billion forints, while payments, contributions and windfall profit taxes from companies in the energy, mining, telecommunications, airline and pharmaceutical sectors would cover the rest of the fund’s expenditures.

• Read also: Hungary increases military spendings in 2023

The fund for boosting the country’s defence is unchanged at 842 billion forints. The 2023 budget law targeted economic growth of 4.1 percent and annual inflation averaging 5.2 percent. The current bill assumes average annual inflation of 15 percent this year. The ministry said the bill seeks to raise reserves in the budget to 255 billion forints from 170 billion, adding that inflation is expected to fall to the single digits by the end of the year.

Socialist budget committee head calls for hearing finance minister over 2023 budget

The (Socialist) head of parliament’s budget committee has called on the finance minister and members of the Fiscal Council to appear before the committee to discuss the amendment to the 2023 budget. Zoltán Vajda said in statement on Thursday that from the outset the Socialists had argued that the 2023 budget passed in the summer was unsustainable and an amendment was needed.

The budget adopted by decree in December, he said, was not a proper budget and public money was not being spent in a transparent manner. Until the new budget is adopted, it will not be clear how taxpayers’ money is being managed, he added. Vajda said clarity was needed regarding the fund for protecting energy subsidies and the purchase of Vodafone’s Hungarian unit. Also, information is needed regarding “the stealthy introduction of the euro”, as well as government support for Erasmus+, with funding for the latter already a part of the budget by decree, he said.

Read alsoNo new Eurocity trains between Budapest and Vienna, Prague, Berlin, Warsaw

Source: MTI