Parliament passes 2023 budget

Hungary’s parliament on Tuesday passed the government’s draft budget for 2023, with 135 votes in favour and 54 votes against.

The budget calculates with a GDP growth of 4.1 percent, a 3.5 percent-of-GDP target deficit, and 5.2 percent inflation.

Finance Minister Mihály Varga said earlier that the government had taken into consideration possibilities of a prolonged war in Ukraine and a resulting crisis.

Meanwhile, the government has pledged to use the budget to assist families, protect pensions, maintain the utility price caps, strengthen security in the country, save jobs and create new ones, as well as to keep the economy on a growth path. The government aims to maintain stability, further improve balance indicators, and maintain a disciplined fiscal policy.

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According to the law passed, central budget spending will amount to 33,426 billion forints (EUR 83.9bn), while revenues will add up to 31,074 billion forints, leaving a deficit of 2,352 billion forints. It sees state debt falling to 73.8 percent of GDP by the end of next year, while the debt is expected to be 76.1 percent at the end of 2022.

Earlier funds will be replaced by two new ones, one with 670 billion forints to preserve the utility price caps, and a 842 billion forint defence fund. The two funds will be financed from windfall taxes on sectors making excessive profits in recent years.

The government has earmarked 3,230 billion forints for family assistance in 2023, 453 billion forints more than this year. A total 4,900 billion forints will be paid out in pensions, including a 13th month pension, while bonuses will increase in line with inflation.

Total defence expenditures will amount to 1,375 billion forints, while 2,670 billion forints have been allocated for health care, and 2,371 billion forints for education.

Expenditures related to EU-funded developments are expected to be 3,400 billion forints, while transfers from Brussels for those programmes are set to reach 2,000 billion. Hungary will pay a 604 billion contribution to the EU budget.

The central budget will assist local governments with 976 billion forints, 102 billion more than in 2022. The total municipal sector will use a combined budget of 4,000 billion forints.

Source: MTI