The war in Ukraine and “failed Brussels sanctions” changed the economic dynamics last year, and the government responded by doubling down on schemes to protect jobs and strengthen families amid the resulting crisis, the finance ministry said on Wednesday, noting that, at the same time, the public debt is expected to have fallen more sharply than initial projections, to 73.5% from 76.8% in 2021. The economy expanded by over an annual 4%, the number of employed grew to over 4.7 million, while the jobless rate remained below 4%, the ministry said in a statement. Hungarians still pay the lowest energy bills in Europe, and owing to measures to shore up energy security and supply, the budget ended with a deficit of 4,753.4 billion forints (EUR 11.9bn) in 2022, it added. Protecting pensioners has been a priority, and the government paid the full 13th month pension as well as additional pension increases. In 2022, 4,791.5 billion forints was spent on retirement benefits, the statement said.
Based on EU methodology, the budget deficit is expected to be 4.9% of GDP, as planned, while taking into account spending on building up the country’s gas reserves, the deficit may come in at 6.1% of GDP. The government targets a further reduction in the public debt this year and sees a budget deficit of 3.9%, the statement added.