Hungary’s central budget deficit increased by HUF 92.8 billion in September, significantly less than the HUF 303.2 billion deterioration recorded in the same month last year, according to a preliminary report from the Ministry for National Economy.

Improved year-over-year, but the situation is still dire

Despite the improvement in September, the state budget remains under considerable pressure. The cumulative deficit for the first nine months of 2026 reached HUF 5,261.9 billion, equivalent to around 72% of the HUF 7,110 billion full-year deficit target included in the proposed budget amendment.

The September figure also needs to be viewed in context. While the monthly deficit was substantially lower than a year earlier, September has produced a surplus in several previous years. Moreover, the nine-month deficit remains well above the HUF 3,328.7 billion recorded during the same period last year. As Prime Minister Péter Magyar highilighted, the government saved a whopping HUF 1200 billion in their first four months with putting an end to “overpriced government spendings”.

Hungary’s government tightens the belt

One significant factor behind this year’s figure was the government’s pre-financing of HUF 2,186.9 billion in European Union funds in August under the Recovery and Resilience Facility (RRF). These funds are expected to appear on the revenue side later in the year. Excluding the impact of this EU pre-financing, the first-nine-month deficit would have been HUF 3,075 billion, around HUF 253.7 billion lower than a year earlier.

The ministry attributed the smaller September deficit partly to tighter spending. Expenditure by ministry-managed budgetary appropriations fell by 61% year-on-year in September. Spending on support for public utility services was also HUF 154 billion lower than a year earlier, although the ministry said this reflected differences in the timing of payments.

Interest expenditure has provided another positive development. During the first nine months, government interest costs were HUF 726 billion lower than in the corresponding period of 2025. At the same time, pension spending increased by 11%, while healthcare expenditure rose by 3.2%.

Revenue growth has been more modest. During the first nine months, revenues increased by 3.4%, compared with a 9% rise in expenditure. VAT revenue grew by 2.3%, household tax payments by 3.3%, and corporate tax receipts by around 1%.

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Finance Minister says we should look at the whole picture

Finance Minister of Hungary, András Kármán stressed that individual monthly figures can be affected by one-off factors and should not be treated as a definitive measure of the budget’s performance. He nevertheless pointed to what he described as increasingly visible spending discipline and falling interest costs.

Hungary’s budget position remains difficult, even though September brought some improvement. With the annual deficit expected to remain exceptionally high, the government’s forthcoming 2027 budget will be closely watched for evidence of whether it can deliver a more substantial reduction in the deficit and strengthen confidence in its longer-term fiscal plans.

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