Mihály Varga: The 2024 budget will focus on defense

Minister Varga accompanied Minister Gulyás and Spokeswoman Szentkirályi to present the government’s plans regarding the 2024 budget, calling it a budget of defence, needed to protect the country's security, families, jobs, pensions and utility cuts.

Minister of Finance Mihály Varga started by noting that as we are living in the shadow of war, as well as an unstable economic environment further hindered by Brussel’s sanctions, it is essential for the budget for 2024 to “focus on defense.” The minister of finance said that the budget was thus planned based on this, adding that “the results achieved so far will not be lost” and the “economic and physical security of the country is guaranteed.”

On this note, the minister reassured those present that the government’s family protection measures will remain intact, and the value of pensions will be preserved, including the 13th month pension. Minister Varga also said that as high energy prices have persisted because of Brussels' misguided sanctions policy, the energy protection fund will be maintained, highlighting that thanks to this, Hungarians pay the lowest utility prices in Europe. Mihály Varga said that sectors that make an extra profit should continue contributing to the protection of the country but added that the phasing out of extra profit taxes will begin by 2024.

Minister Varga also said that the Hungarian budget must prepare for the fact “that the war will not end,” and “strengthening the country's physical security is more important than anything else.” As a result, the Defense Fund will be HUF 1.3 trillion, exceeding the 2 percent of GDP required by NATO.

Mihály Varga said that the economy performed well in 2022, and the government's goal this year is to continue that trend, forecasting GDP growth of 1.5 percent in 2023 and a much higher growth rate of 4 percent in 2024. The minister said the general government deficit will be below 3 percent next year, adding that the government expects a further reduction in public debt and an annual inflation rate of 6 percent.

Minister Gulyás stated that “we reject the European Commission's proposal and will preserve the utility price reduction,” referring to the EC’s suggestion to discontinue the price cap scheme. He added that reducing the budget deficit is a priority for the government and noted that Hungary is among the countries where the deficit was in fact reduced even in an election year.

Regarding the EU budget commissioner's statement on the continued freezing of EU funds due to Hungary, Minister Gulyás said that “this concerns only a small part of the procedure.” He pointed out that in the case of the recovery fund, an agreement has already been reached with the Commission on judiciary issues, and invoices for those funds will be sent soon. However, with the conditionality procedure, more and more requests have been received, which hinders the government’s efforts toward constructive negotiations.