Hungary's budget

LMP wants more money on environmental protection

Environmental catastrophe River Sajó Slovakia Hungary

LMP believes spending on environmental protection isn’t “money thrown out the window”, but goes toward “the protection of our present and future, our children and civilization”, the co-chair of the opposition party said at a press conference streamed on Facebook on Sunday.

Speaking on the International Day for Biological Diversity, Erzsébet Schmuck noted that over 90 percent of the natural floodplains of Hungarian rivers have been lost, while the biological diversity of natural protection areas is “slowly, but surely” on the decline.

She pointed to the “ecological catastrophe caused by human irresponsibility” on the Sajó river, which flows from Slovakia into Hungary, resulting in “the destruction of an entire ecosystem”.

She also said ladybug and swallow populations are “radically falling” because of “deforestation and a reduction in green areas because of environmental pollution, cities, roads, industrial plants and luxury investments”.

Schmuck said LMP politicians have tabled a number of proposals in parliament in the past decade that serve to protect the biological diversity of the Carpathian Basin.

“There isn’t much time left,” she warned, “The question is whether the current powers understand what is at stake”.

“When you’ve cut down the last tree, when you’ve caught the last fish, you’ll realise that you can’t eat money,” she added.

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Hungary to launch a EUR 780m energy efficiency program?

Solar power plant in Felsőzsolca

Opposition LMP wants to allocate 300 billion forints (EUR 780m) for energy efficiency programmes, including installing insulation, changing windows and upgrading heating systems, MP Bernadett Bakos said at a press conference streamed on Facebook on Saturday.

Hungarians could be shielded from the current energy crisis by developing renewable energy sources and improving energy efficiency, Bakos said. Hungary’s energy dependence could be improved “to a large degree” by cutting energy consumption, but that will require a “genuine, green utilities price reduction scheme”, she added.

She said between 100,000 and 150,000 homes could be insulated and get energy efficiency upgrades with 300 billion forints.

Source: MTI

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Orbán cabinet has to take responsibility for the rise in food prices it had caused, says DK

At a time when basic necessities are luxuries for some Hungarians, the government has to take responsibility for the rise in food prices it had caused, the deputy leader of the opposition Democratic Coalition said on Wednesday.

László Varju said in a statement that inflation had reached twenty-year records, and he cited the Central Statistical Office as saying that some Hungarians had been forced to cut the amount of food they buy due to skyrocketing prices.

“Many families refrain from buying meat, vegetables or coffee. The price hikes are mainly due to the weakest Hungarian forint in history, the results of the work of [Prime Minister] Viktor Orbán and [central bank governor] György Matolcsy in the past few months,” he said.

The government should admit that the central bank has no exchange rate target, he said.

“It is time Matolcsy told Hungarian families that the they cannot do their shopping or afford meat, and their mortgage payments are going up, because the central bank has no exchange rate target,”

Varju said.

As we wrote yesterday, annual inflation in Hungary was almost in double digits in April.

Hungary’s cash flow-based budget deficit close to EUR 6.9bn at end-April

forint exchange rate - daily news hungary

Hungary’s cash flow-based budget deficit, excluding local councils, reached 2,635.6 billion forints (EUR 6.9bn) at the end of April, the finance ministry said in a preliminary release of data on Monday.

The central budget deficit reached 2,669.7 billion forints at the end of April. The social security funds were 18.7 billion in the red, while the separate state funds had a surplus of 52.8 billion forints.

The deficit widened from 2,309.4 billion forints at the end of March.

The full-year cash flow-based general government deficit target is 3,152.7 billion forints.

The ministry reiterated the government’s commitment to “improving balance indicators” in the release.

“In the unpredictable global economic environment caused by the war, Hungary’s stability must be preserved,” it said.

The ministry affirmed it expects the accrual-based general government deficit, relative to GDP, to reach 4.9 percent this year, while the year-end state debt ratio declines to 76.1 percent.

It calculates with GDP growth of 4.3 percent.

Read more news about Hungary’s budget

EC identifies ‘serious risk’ for sound financial management of EU budget in Hungary

Reynders

The European Commission has identified issues in Hungary that indicate sound management of European Union monies are at risk, European Union Commissioner for Justice Didier Reynders said in a European Parliament debate in Strasbourg on Tuesday.

“I very much regret. that I am not in a position today to be able to report back to you about positive trends when it comes to the rule of law in Poland and Hungary,” Reynders said in the debate on the ongoing hearings under the EU’s Article 7 procedure regarding the two countries.

The EC does not hesitate to use the tools at its disposal to protect the bloc’s fundamental values and financial interests and will not delay in initiating proceedings if the rule of law is under threat, the commissioner said.

Reynders noted that the EC last week activated against Hungary the mechanism linking EU funding to the rule of law. He said

the rule-of-law issues identified by the EC “affect or seriously risk affecting” the sound management of the EU budget and the EU’s financial interests.

Fidesz reaction

Addressing the debate, Fidesz MEP Balázs Hidvéghi said the accusations levelled at Hungary were “not factual, they are not of a legal nature, but clearly are only political”.

The left-liberal forces “propagating the new religion, multiculturalism and open society a la [US financier] George Soros” do not like Hungarian policies that allow the country to decide freely on matters that do not fall under EU competency, Hidvéghi said.

They criticise Hungary because it distinguishes between refugees and economic immigrants, defines marriage as the union of a man and woman and asserts that the father is a man and the mother a woman, he said.

Hidveghi said

Hungary more recently had “come under attack” over its decision to protect children and its stance that parents should have the exclusive right to decide on the sex education of their children.

Those who claim press freedom is lacking in Hungary do not like that “unlike in western Europe, in Hungary, right-wing, conservative, Christian Democratic media exists and flourishes”, he said.

All of Hungary benefits from the country’s economic growth, otherwise the government would not keep getting re-elected with such a large majority, the MEP said.

Hidvéghi said

Brussels had become a “self-righteous postmodern witch hunt club” which used sanctions as blackmail and wanted to “impose a radical and narrow ideology on everyone else”.

It is time to stop the attacks against Hungary and respect Hungarians’ right to decide on matters concerning their country, he said.

Hungary trade balance shows EUR 117 m deficit in Feb

Hungary’s trade balance showed a 117 million euro deficit in February, the Central Statistical Office (KSH) confirmed in a second reading of data released on Monday.

Hungary, an export-driven economy where trade surpluses are the norm, had a trade deficit for the eighth month in a row, KSH said.

Exports rose by an annual 18.7 percent to 11.500 billion euros and imports climbed by 30.5 percent to 11.617 billion euros.

Trade with other European Union member states accounted for 76 percent of exports and 70 percent of imports.

Hungary’s terms of trade deteriorated by 7.1 percent during the period as the forint edged up 0.3 percent to the euro but weakened by 6.3 percent against the dollar.

Read more about Hungary’s budget

Hungary’s cash flow-based budget deficit over EUR 6.2bn

Hungary’s cash flow-based budget deficit, excluding local councils, was at 2,309.4 billion forints (EUR 6.2bn) at the end of March, the finance ministry confirmed in a detailed release of data on Monday.

The central budget shortfall was 2,331.4 billion forints, while social security funds were 17.2 billion in the red. Separate state funds had a surplus of 39.2 billion.

The deficit target for the full year is 3,152.7 billion forints.

The ministry said expenditures on home subsidies and on pensions were higher in January-March than in the base period.

It noted that Hungary’s year-end state debt-to-GDP ratio was a 76.8 percent in 2021, while the budget deficit reached 6.8 percent of GDP.

“In the current situation of war, it is of crucial importance that Hungary’s economy and budget remain stable, and that households do not bear the burden of the war,” the ministry said.

“The budget must continue to manage, as a priority, border defence, assistance for refugees, family support and maintaining tax reductions,” it added.

“Maintaining the stability of the budget in the current situation is a task of priority importance for the government,” the ministry added.

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Government urges greater EU contribution to migration costs

Border cross

The Hungarian government is urging greater contribution by the European Union to financial burdens linked to migration, the finance minister said on Wednesday.

Mihály Varga said on Facebook that Hungary had spent 600 billion forints (EUR 1.6bn) on protecting the southern border and 40 billion forints on managing the Ukrainian refugee situation. The EU contribution covers only 2 percent of the costs, he added.

Meanwhile,

Balázs Hidvéghi, an MEP of Hungary’s ruling Fidesz, will be in charge of a set of recommendations in the European Parliament which aim to enhance law enforcement cooperation across EU member states.

The recommendations will help member states coordinate their efforts towards eliminating cross-border crime by detecting and preventing illegal immigration and people smuggling, Hidveghi said in a statement on Wednesday. They will aim to enhance cooperation between the police forces of member states for example in capturing suspected criminals or in instances when a joint operation is required, he said.

“The recommendations will be a step towards a safer Europe,” the MEP said.

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The state budget’s deficit reached 794m EUR in February alone!

Hungarian forint state budget historic lows

Hungary’s current account had a 794 million euro deficit in February, widening from a 763 million euro gap in the previous month, preliminary monthly data released by the National Bank of Hungary (NBH) on Thursday show.

Hungary had a 316 million euro trade deficit for the month, the balance of an 660 million euro deficit in trade of goods and a 344 million euro surplus in trade of services.

The primary income balance showed a deficit of 319 million euros, as investors repatriated 428 million euros from direct investments.

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Hungarian budget deficit doubled in only one year!

money hungarian forint huf inflation

Hungary’s cash-flow-based budget deficit, excluding local councils, was 2,309.4 billion forints at the end of March, the Finance Ministry said in a first release of data on Friday.

The central budget shortfall was 2,331.4 billion forints, while social security funds were 17.2 billion in the red. Separate state funds had a surplus of 39.2 billion.

The deficit target for the full year is 3,152.7 billion forints.

The ministry said expenditures on home subsidies and on pensions were higher in January-March than in the base period. It noted that Hungary’s year-end state debt-to-GDP ratio was a 76.8 percent in 2021, while the budget deficit reached 6.8 percent of GDP.

“In the current situation of war, it is of crucial importance that Hungary’s economy and budget remain stable, and that households do not bear the burden of the war,” the ministry said.

“The budget must continue to manage, as a priority, border defence, assistance for refugees, family support and maintaining tax reductions,” it added.

(HUF 100 = EUR 0.2619)

Read alsoHungary’s budget deficit reaches EUR 14.2bn for 2021

Minister: public debt down more than earlier projected

Hungarian forint banknotes

Fresh data show that the public debt dropped to 76.8 percent of GDP by the end of last year, lower than earlier projected, while the ESA budget deficit was 6.8 percent, as against the earlier projection of 7.5 percent, Finance Minister Mihály Varga said on Friday.

Varga said on Facebook that Hungary’s public debt was falling while the European Union average exceeded 90 percent, and the European Commission projected further debt increases in the bloc.

“Not only did we make a promise, we fulfilled it, too,”

Varga said. The minister said the data vindicated the government’s approach to the pandemic-related crisis of supportive spending rather than austerity.

Hungary was the quickest in Europe to relaunch its economy, he said, and this handed it an early advantage when it came to improving the balance indicators.

Varga said the government’s policy of reducing Hungary’s exposure to foreign debt financing while increasing the role of Hungarian households in the bond market had proven “correct”.

The minister noted that the government boosted financial reserves at the end of last year, thereby reducing the country’s financial vulnerability before the Ukraine war broke out.

“Hungary today is stronger and more resilient than ever before,” Varga said.

Read alsoShocking! Hungary’s government sector had a 10.15 mn EUR deficit in 2021

Shocking! Hungary’s government sector had a 10.15 mn EUR deficit in 2021

Hungary’s government sector had a 3,736 billion forint deficit in 2021, equivalent to 6.8 percent of GDP, calculating with the European Union’s accrual-based accounting methodology, the Central Statistical Office (KSH) said in a preliminary release on Friday.

The deficit relative to GDP was a full percentage point under the gap in 2020. The National Bank of Hungary said the public debt amounted to 42,414 billion forints at the end of 2021, or 76.8 percent of GDP. Government revenue came to 22,695 billion forints while spending totalled 26,431 billion last year, with revenues increasing by 1,739 billion, or 8.3 percent, and expenditure up 1,715 billion, or 6.9 percent, compared with the previous year.

Both the budget deficit in 2021 and the public debt-to-GDP ratio at the end of the year were appreciably lower than expected, Dániel Molnár, an analyst at the Századvég research institute, told MTI. In Hungary’s Convergence Programme submitted last April, the government forecast an ESA deficit of 7.5 percent and a public debt ratio of 79.9 percent, he noted.

He said rapid economic growth had a positive effect on the revenue side of the budget, while income tax revenues linked to the personal income tax refund for families with children only fell by 5.8 percent. VAT revenues were also appreciably higher thanks to higher turnover and inflation, Molnar added. He noted that the government planned to reduce the deficit and public debt further, and the government is postponing certain investments to this end.

Growing consumption, high employment and double-digit wage growth will boost the revenue side this year, he said, while buoyant economic growth and high inflation presaged big reductions in the budget deficit and public debt.

Molnár warned, however, that the Ukraine war created risks to growth due to the disruption of supply chains and rising energy and food prices. Having adequate reserves is highly important in protecting the Hungarian economy against the fallout of the war, he added.

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Hungary to get hundreds of millions of EUR from the EU because of the war

Refugees from Ukraine

The fact that Hungary is to receive over 100 billion forints worth of European Union resources as a result of the Russia-Ukraine war shows Prime Minister Viktor Orbán’s “significant influence” and the effectiveness of Hungarian interest representation, the prime minister’s chief of staff said on Friday.

Gulyás told public media at the opening event of Somlo castle after renovation that Orbán had achieved considerable success in Brussels because, in addition to the EU resources due to Hungary, the country will receive 300 million euros towards the costs of looking after refugees from Ukraine.

This sum of more than 100 billion forints can be freely used to cover the costs incurred as a result of the war, he said. It will be of great help in avoiding Hungarians paying the cost of war, he added.

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Gulyás said that hardly more than a week after Orbán’s letter to European Commission President Ursula von der Leyen,

the extra 100 billion forints has been made available.

“Taking a resolute stand has had a successful outcome in Brussels”, while Orbán’s being the longest-serving leader within the EU body of heads of state and government carries great weight, he added.

Gulyás said that contrary to claims by the left wing, Hungary’s talks on the current EU budget were progressing “in line with a completely normal schedule” and the partnership agreement would be signed within the next few weeks or months. He also said that Hungary had drawn the

largest proportion of EU resources in the previous budget term.

Meanwhile, opposition Democratic Coalition MEP Klára Dobrev has accused Prime Minister Viktor Orbán of “lying” via a statement issued by his press chief that the EU had started to release funding for Hungary.
Dobrev told an online press briefing on Friday that

the government was not receiving “a single cent” of thousands of billions of forints from cohesion funds, operational programmes, or recovery funds and the low-cost loan linked to them.

She said the EU had forwarded money for the purpose of “making life easier for the many millions who have fled Ukraine”. This funding is for taking care of refugees and related health, education and accommodation provision, she added.

Dobrev said Hungary had not received EU money “for months because EU taxpayers are sick of having their money stolen”.

The MEP insisted that the EU funds would be unlocked “as soon as there is a change of government”. She said a government run by the current opposition would introduce strong anti-corruption measures and Hungary would join the European Public Prosecutor’s Office.

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Hungarian health waiting list unbearable, more money coming in

The Hungarian government is spending 13.6 billion forints (EUR 34.6m) on shortening waiting lists in Hungarian health care, the human resources minister said on Tuesday.

Miklós Kásler told a press conference that waiting lists had “grown extremely long” by 2010, when the Fidesz government came to power. With robust government spending, the waiting lists were cut to 26,000-28,000 people by 2019, from 70,000 in 2013, he said.

The coronavirus pandemic has brought a rise in backlogs in health care worldwide, he said.

In Hungary, the treatment of emergency cases, as well as cancer and cardiac illnesses, remained a requirement, he said.

At another press conference, Kásler said the government had spent a total 9.3 billion forints on developments at the South-Pest Centrum Hospital – National Haematology and Infectology Institute in recent years.

Kásler noted

the “unique position” of the Centrum Hospital in the region, adding that its development was “necessary and justified”.

Concerning the actual projects, the minister said the hospital’s maternity ward was now “family-friendly”: a modern diagnostics unit has been added, while the medical technology and energy systems have been upgraded. He added a database of oncology and haematology patients is under development.

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Hungary GDP growth 7.1 pc in 2021

finance minister varga

Hungarian economic output grew by an annual 7.2 percent in the fourth quarter, bringing full-year growth to 7.1 percent, the Central Statistical Office (KSH) said in a first reading of data on Tuesday.

Adjusted for seasonal and calendar year effects, fourth-quarter GDP rose by 7.1 percent.

Quarter on quarter, the economy expanded by 2.1 percent, driven by market services, KSH said.

KSH noted that Q4 GDP was 4 percent higher than in Q4 2019, before the coronavirus crisis.

Full-year GDP increased by 2.1 percent from 2019.

Commenting on the data, Finance Minister Mihály Varga said last year’s rate of growth was the most rapid in Hungarian economic history.

The government’s policies based on tax cuts and investments in families and companies had been vindicated,

Varga told a press conference. The policy prepared the groundwork for a swift rebound after the pandemic economic crisis, he said.

Hungary’s economic performance is outstanding compared with other European Union countries too, he said.

Growth in 2022 is expected at 5.9 percent,

he added.

As we wrote before, Hungary’s budget deficit reaches EUR 14.2bn for 2021, details HERE.

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Opposition vows to inject extra € 3.4 billion into Hungarian healthcare

Péter Márki-Zay Oposition PM Candidate

The united opposition plans to spend an extra 1,200 billion forints (€ 3.4 billion) in four years on Hungarian health care, its prime ministerial candidate told a forum on Friday.

The extra funding would reform health care in line with European market methods rather than operating a centralised “communist system”, Péter Márki-Zay told a press conference in front a district health clinic in Budapest.

He accused the Fidesz government of regarding health care purely as a business and running public health care into the ground so that the only option remaining to the sick would be to use hospitals owned by “Fidesz oligarchs”.

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The politician vowed to revamp Hungary’s health care and to fund it through a single national insurance model.

He said patients waiting more than six months for surgery would be referred to a private provider and the state would pick up the bill.

Márki-Zay claimed to be in possession of “inside information” suggesting that Fidesz planned to privatise health care after the election.

He said Hungarians currently pay 30 percent of their health-care costs out of their own pocket, which, he added, was “the highest rate in the EU”.

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Funding for Hungary’s health-care system, he said, would increase to 7 percent of gross national product — the EU average — from 4.5 percent last year in four years.

Márki-Zay also promised health professionals a “significant salary increase”.

In response, ruling Fidesz said in a statement that “the Left would reintroduce pay-for health services”. They said the opposition plans were in fact aimed at “drastic privatisation” in the health sector.

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Hungary’s budget deficit reaches EUR 14.2bn for 2021

Hungary’s cash flow-based budget deficit, excluding local councils, reached 5,101.5 billion forints (EUR 14.2bn) at the end of December, the finance ministry said in a preliminary reading of data released on Tuesday.

“The budget ensured, to the full extent, the resources necessary to restart the economy and the defence against the pandemic,” the ministry said.

“In the interest of restarting the economy, the government continued its economic policy based of tax reductions, job creation and the strengthening of families in 2021.

As a result, the economy may have grown by 6.4 percent, while the number of employed rose to 4.7 million and the jobless rate fell under 4 percent. Additionally, resources used for family subsidies and for the defence of pensioners increased further,” the statement said.

The deficit climbed by 1,170.2 billion forints from the previous month.

The central budget deficit reached 4,662.3 billion forints at the end of December, the social insurance funds were 419.4 billion forints in the red and separate state funds also showed a gap of 19.8 billion.

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Finance Minister: Hungary is on a disciplined budget in 2022

varga mihály finance minister

Hungary’s government is running a disciplined, tight budget, Mihály Varga, the finance minister, said in an interview to public radio on Sunday, noting that it boosted reserves at the end of last year and rescheduled investments this year.

Varga said the ministries have already adjusted their spending in light of the cap on spending of 350 billion forints (EUR 974m) enacted at the end of last year.

At the same time, the government seized the opportunity to make longer-term investments, and this year, too, Hungary’s investment rate will be higher than the EU average, he added.

Varga said it would not be necessary to cut spending any further than measures already taken, with 755 billion forints already lopped off expenditures. So this year, the deficit will be one percentage point lower than the original target of 5.9 percentage points.

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With greater financial stability and more bullish investor sentiment, growth will be aided in the long run, he said.

Also, measures taken during the coronavirus epidemic are expected to aid the budget to a speedier return to balance, he added.

The economy was already on an robust growth path before the outbreak of the epidemic, the minister said, adding that growth in 2019 was the highest in the European Union. Post-crisis, the economy has since returned this growth path relatively quickly, with a GDP increase of 6.4 percent expected in 2021 and well over 5 percent this year, he added.

Growth will lay the foundations for further tax cuts in addition to those made over the past ten years, Varga said.

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The minister said that whether the cap on the price of fuel at the pump can be maintained at 480 forints after Feb. 15 would depend on the price of oil on the world market, which, he added, was unpredictable.

Varga said that development funds linked to the EU recovery programme were contained in the budget, and even a lack of an agreement with the European Commission would not forestall their launch.

Meanwhile, he said that debt amassed in 2020 had eased in 2021, and the final figures would be available in February. Whereas average debt levels in Europe shot up to over 100 percent of GDP from around 80 percent, in Hungary’s case debt rose from 65 percent to 80 percent.

Monetary policy, Varga said, was decisive as regards inflation, and Hungarian policymakers have taken steps since mid-summer to curb it with higher interest rates, which meant higher state spending on financing government securities and debt.

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