Hungary’s 2024 budget is a defence budget, finance minister says

Addressing the debate of the 2024 budget in parliament on Tuesday, Finance Minister Mihály Varga qualified the budget as “a defence budget”, saying that in times of war Hungary must guarantee its security, protect families, pensions, jobs and maintain low utility costs.

That is why the focus of the budget is to strengthen the scheme to keep utility costs low and boost national defence, the finance minister said, adding that Hungary faced challenges on several fronts such as the protracted war and “failed Brussels sanctions” that had resulted in a serious energy crisis in Europe. The additional burdens in energy prices are costing the country more than HUF 1,000 billion (EUR 2.7 billion), he said.

Varga said protecting the country’s results achieved so far was the government’s primary task, adding that financial stability was essential for security. A strong economy combined with budgetary discipline were needed in this regard, he added.

The government is committed to reducing inflation to single digits by the end of this year, and inflation is targeted at 6 percent next year, while the economy is expected to grow by 4 percent in 2024, the minister said. The public debt as a percentage of GDP will be reduced to 69.7 percent this year and 66.7 percent next year, he said, adding that a deficit target of 2.9 percent of GDP was slated.

László Windisch, head of the State Audit Office, called the budget draft “well-founded” and said its targets were realistic. He added, however, that the excise tax revenues may end up amounting to HUF 53 billion less than planned.

Windisch also said meeting the budget targets was conditional on the accuracy of the government’s macroeconomic forecasts, adding that the draft “requires institutions of the central budget and municipalities to take further measures of economy”.

He also said the central budget faced payment obligations of an expected HUF 430 billion connected with central bank losses in 2023.