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Finance Minister Mihály Varga said that Hungary could have around 2.0% of GDP deficit for the full year, better than the original 2.4% target.

Government debt could fall to around 71% of GDP with 4.9% GDP growth between Q1-Q3 2018 and 4.6% expected for 2018, he told a press conference. Varga attributed the good economic performance to government measures such as a six-year wage agreement and steps taken to whiten the economy.

Hungary’s cash flow-based general government budget, excluding local councils, ran a 1,445.1 billion forints (EUR 4.5bn) deficit at the end of December, the finance ministry said in a first reading of data. The deficit reached 106.2% of the 1,360.7 billion forint full-year target.

Hungary’s government has been pre-financing European Union-supported projects to avoid a backup at the end of the 2014-2020 funding cycle. The lag between payouts to recipients and EU transfers had lifted the general deficit over 135% of the full-year target by November, but some 890 billion forints from Brussels that arrived in December shored up the gap.

The central budget deficit reached 1,368.8 billion forints while separate state funds had a 7.6 billion surplus and social insurance funds a 83.9 billion deficit.