Hungary’s central government finances recorded a HUF 424.1 billion (EUR 1.2 billion) surplus in June, marking the strongest June budget balance on record and offering a welcome boost after months of mounting fiscal pressure.
According to preliminary data released by the Ministry of Finance, the surplus was dramatically higher than the HUF 27.4 billion recorded in June 2025.
June is typically a deficit month, making this year’s result particularly important.
However, despite the exceptionally strong monthly performance, Hungary’s fiscal position remains under strain. By the end of June, the central government’s accumulated deficit had reached HUF 3,382.2 billion, equivalent to 80.2% of the full-year budget deficit target.
What drove the June surplus?
The Ministry of Finance has yet to publish a detailed breakdown of the June figures, but several factors contributed to stronger revenues during the first half of the year. Tax and social contribution revenues increased by 6% compared with the same period in 2025. Among the strongest performers were:
- VAT revenues, which rose by HUF 178.1 billion, supported by stronger domestic consumption, higher imports and January’s excise tax increase on tobacco products;
- payroll-related taxes and social contributions, which increased by nearly HUF 625 billion, reflecting wage growth and one-off payments;
- contributions from financial institutions, which exceeded last year’s level by HUF 120.7 billion, largely due to a higher tax rate introduced for 2026.
These gains were partially offset by weaker-than-expected revenues from the energy sector and lower corporate tax receipts.
Energy-related tax payments fell HUF 47.1 billion year-on-year, mainly because of a reduction in the so-called “Robin Hood tax” on energy suppliers and delayed payments related to the Ural-Brent windfall tax, according to Portfolio. Corporate tax revenues were also HUF 51.8 billion below last year’s level, partly due to higher tax refunds and the timing of payments.
Spending remained elevated
Government expenditure continued to rise across several major areas during the first half of the year. Investment spending reached HUF 346.6 billion, almost HUF 100 billion higher than a year earlier, largely due to payments for road construction projects. Housing support also increased significantly, with spending reaching HUF 255.6 billion.
Meanwhile, pension expenditure totalled HUF 4,300.4 billion by the end of June, including the 13th-month pension and part of the newly introduced 14th-month payment. Healthcare spending reached HUF 1,544.1 billion. On the other hand, spending on public transport and utility service subsidies fell slightly to HUF 1,335.7 billion, down HUF 18.7 billion compared with the first half of last year.
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Budget picture improving, but challenges remain
Within the central government subsector, the central budget recorded a HUF 3,271.0 billion deficit, while separate state funds posted a HUF 103.4 billion surplus. Social security funds recorded a HUF 214.6 billion deficit.
The strong June performance suggests that the government has begun to stabilise public finances after the budget deteriorated sharply ahead of this year’s general election.
Nevertheless, economists caution that the first-half figures still point to significant fiscal challenges. The current annual deficit target is widely expected to be revised later this year to better reflect economic realities, meaning a clearer picture of Hungary’s fiscal outlook is likely to emerge in the autumn.
For now, June’s record surplus provides encouraging news, but whether it marks the beginning of a sustained improvement has yet to be seen.
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