Hungarian Fiscal Council reviews budget amendments

The Hungarian Fiscal Council has issued an opinion on the proposed amendments to this year's budget, noting significant changes in economic and fiscal indicators. The Council stated that the planned 7.5 percent ESA deficit in the government sector and a public debt-to-GDP ratio rising to 77.5 percent comply with the requirements of the most recent constitutional amendments.

However, the Council emphasized the need for a substantiated plan to ensure the public debt ratio enters a downward trajectory over the medium term. It noted that the government provided a justification rather than detailed calculations for how the new figures align with a decreasing deficit and debt path.

Risks to the budget's fulfillment include the possibility that economic growth may fall below the revised 2 percent forecast, which currently sits at the upper end of projections. Potential downward pressures on growth include global trade tensions, ongoing conflicts, energy supply constraints, and domestic electricity production challenges. Conversely, rising real wages and expected increases in investment may support consumption and GDP growth for the remainder of the year.