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The budget amendment which contains measures to protect capped energy bills has been presented to parliament, the finance ministry said on Thursday. Despite the effects of the war in Ukraine “the government is not abandoning its primary goals of protecting Hungarian families, jobs, and the value of pensions … This year, the government is also keeping caps on energy bills up the level of average consumption while reducing the public debt and the budget deficit,” the ministry said in a statement.
Given the emergency situation, the government has amended the 2023 budget by government decree, bearing in mind guidelines already adopted by parliament and the backing of the Fiscal Council, and it has submitted the relevant bill to parliament, with a new revenue target of 36,358.4 billion forints (EUR 91bn), up from 31,073.7 billion, and a spending target of 39,758.6 billion, up from 33,425.8 billion. The deficit is set to widen to 3,400.2 billion forints from 2,352.1 billion, while the public debt is targeted at 69.7% of GDP, down from an estimated 73.5% in 2022.
The fund for protecting capped energy prices is set at 2,610 billion forints, up from 670 billion in the original law passed last July. Central budget support for the fund is set at 1,198.3 billion forints, while payments, contributions and windfall profit taxes from companies in the energy, mining, telecommunications, airline and pharmaceutical sectors would cover the rest of the fund’s expenditures. The fund for boosting the country’s defence is unchanged at 842 billion forints.
The 2023 budget law targeted economic growth of 4.1% and annual inflation averaging 5.2%. The current bill assumes average annual inflation of 15% this year. The ministry said the bill seeks to raise reserves in the budget to 255 billion forints from 170 billion, adding that inflation is expected to fall to the single digits by the end of the year.