Hungary targets a 4.9% deficit in Magyar’s first full budget
Hungary’s government has set a 2027 budget deficit target of 4.9% of GDP, down from an estimated 7.5% this year, as Prime Minister Peter Magyar presented its first full fiscal plan. Reuters reports the plan aims to bring the deficit below the EU’s 3% ceiling by 2030; analysts cited by IntelliNews consider next year’s target achievable but question whether the longer-term reduction will be delivered.
Bottom line — The 2030 target is 2.8% of GDP, but Capital Economics doubts Hungary will get below 3% in an election year.
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The government says savings from cancelled contracts and lower spending, new taxes and reduced interest costs will fund the consolidation.
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Magyar’s plan sets aside 1.4 percentage points of GDP for election pledges, leaving 2.6 points for deficit reduction, according to Reuters.
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The budget includes a HUF 300bn (€826mn) contingency reserve, Reuters reports.
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IntelliNews says Fitch has Hungary at BBB with a negative outlook and warned of a downgrade without credible fiscal consolidation.
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Magyar says personal income tax on wages up to the minimum wage will fall from 15% to 9%; the change is expected to affect 2.5mn workers.
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More than 603,000 public-sector workers are due pay rises in 2027, with a total cost of HUF 677bn (€1.85bn), according to the LinkedInEditors report.