Hungary raises budget deficit target to 7.5 percent of GDP

The Tisza government has announced significant revisions to its 2026 budget, raising the projected deficit target from 3.7 percent to 7.5 percent of GDP. Government calculations suggest that without new measures and EU funding, the deficit could have reached 8.3 percent.

Under the revised plan, the national debt is expected to rise from 74.6 percent to 77.5 percent of GDP. To manage economic challenges, the government has promised 700 billion forints in state operating savings and a 500 billion forint Havária Fund to address drought and energy crises. This package includes support for vulnerable children's school supplies, VAT exemptions for certain medicines, and expanded social firewood assistance.

Opposition MP Piroska Szalai has criticized these developments, suggesting that the budget deficit could potentially widen even further than current projections. She noted that while the government aims to curb spending, the debt is rising even before significant new spending programs have commenced.

In separate monetary news, the Magyar Nemzeti Bank (MNB) lowered its base interest rate by 25 basis points to 5.50 percent.