Official: Hungarian government’s financial calculations failed in 2023
As we bid farewell to 2023, it is evident that the Hungarian government fell short in its financial forecasts. The budget deficit, as a percentage of GDP, is projected to be 5.9% in 2023, surpassing the initial target by 2 percentage points. Furthermore, a 0.4% economic contraction is anticipated not only for this year but also in the years to follow, indicating a slower-than-expected recovery for the Hungarian economy.
Official forecast
In adherence to the Public Finance Act, the government is obliged to unveil its primary budgetary and macroeconomic figures for the next three years by 31 December, as reported by Portfolio. Notably, the government strategically chose the very last days of the year to release these figures in recent times, specifically on 31 December in 2020, 29 December 29 in 2021, and 30 December in 2022. In 2023, the latest official medium-term macroeconomic and budgetary forecasts were unveiled on the evening of Saturday, 30 December. Given the festive season’s distractions between Christmas and New Year’s Eve, it raises questions about the timing of such crucial forecasts.
Predictions for 2024
Turning our gaze to 2024, despite optimistic predictions during the summer, the new macroeconomic outlook paints a more modest picture for Hungary’s economic growth. GDP growth for 2024 is projected at 3.6%, compared to the 4% approved in next year’s budget. Inflation, initially anticipated at 6%, is now forecasted at 5.2% for the upcoming year. Moreover, the government envisions average inflation remaining above 3% in 2025, contradicting summer forecasts predicting a return to the 3% target by 2025.
Higher-than-expected deficit
The Ministry of Finance’s document reveals the government’s revised expectation, indicating a budget deficit of 5.9% of GDP in 2023—exceeding the raised target of 5.2% set in October. This means that the number is even higher than the deficit target that had been raised from 3.9% to 5.2% in October. Some may wonder why the deficit target was raised in October as it seems the government did not take the right measures to keep to that number. If the budget‘s most important number is set in stone, it will lead to great uncertainty. It’s all clear to investors and credit rating agencies that the target could have been changed at any time, when looking at data. Nevertheless, the reasons behind this shift remain elusive, prompting questions about the government’s measures and the uncertainty surrounding the budget target.
Why did the budget fail?
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6 Comments
The Hungarian Economy SHRANK again in 2023, performing in fact WOEFULLY against the “propaganda” driven machine, the expectations PUBLISHED by the Orban Government.
This process, that in-corporates into there style of Governance, that is to Brain Wash or “feed” into the heads of the population of Hungary – falseness, driven in its message of deliverance, that FAILS to speak and communicate TRUTH – opting for preferring rather to continuously LIE, totally neglecting CANDOUR never giving Hungarians, the real truthful factual position or picture, of Hungary’s – economic / financial and “other” performance or position.
Hungary remains DEEP in a BLACK Hole of a descending Recession.
It’s interesting given that despite the inflation, the government under forecasted the VAT receipts by over 12%. Could it be that people don’t have more money in their pockets? I wonder if the government will conclude, given that the public has already accepted a 27% VAT rate, that it can raise VAT to 33% to cover the shortfalls?
No mention of the billions of Euros the EU refuses to release? Could this be the reason for the ‘elusive’ shift?
Dr Lotto – valid comments that add to the BIG Picture of those that really know and understand what in FACT is the Economic picture of Hungary in that it’s in a gargantuan MESS.
Orban of course and his Minister of Finance – Mihaly Varga would never “go there” in admission of this FACT, like the word Recession, just “passed over” in Hungary, never happened but those that know, the word Recession associated to the Hungarian Economy has been evident, since as far back as the outbreak of Covid in Hungary circa February 2020.
Hungary remains deep in a Recession.
Imports HORRIFICALLY down in latest report issued by the Government near on 18%.
This is another massive sign indicating there is falling ability of businesses and “other” having cash availability to pay for imports.
Dear Hungarian Families! Do not believe facts and data, and how the numbers just do not seem to reconcile.
They are generated by the Soros family, Liberal Elites and Brussels Bureaucrats to stop our magnificent Politicians, fighting for you!
Happy 2024, everyone. Here’s to health and hope! We can all make a difference – many small increments go a long way.
APPALLING summary – Norbert.
Manipulation of Fact & Truth.
There is NO greater example of in the 14 years Victor Orban and his Government have been in POWER, taking as we are this day, that is not just only a cataclysmic Economic & Financial disaster, but a country, being “stripped” of a Democratic Political system of Governance, multitude of relationships destroyed by Orban, his “warped” Political ideologies, the heavily “bruised and fractured” another Orban disaster with the European Union, the “progressive movement towards being a Dictatorship, all these examples, on a list that could be EXPANDED, that has been encased wrapped in and around, carried out and practiced by the Orban lead Government of Hungary, under a philosophy that has continues to be – driven by Lies & Deceit.