The finance minister said the government will continue to improve budgetary balance and expects to have a budget deficit down at 4.9 percent and state debt at 76.1 percent of GDP by the end of the year.
Mihály Varga, the candidate for finance minister, told parliament’s budgetary committee on Thursday that the budget will have to be amended to maintain the deficit target, in view of the changes to the economic environment due to high inflation, rising energy prices and the war in Ukraine. The government aims to preserve stability, keep the economy on a safe growth path and protect earlier achievements such as family allowances, he said. The draft budget for 2023 will be submitted early next month, he said, with an estimated growth of 3-4 percent of GDP and the deficit expected to fall to around 3.5 percent and state debt to 73.8 percent of GDP, he said. Responding to a question, Varga said next year’s budget was planned with a 5.7 percent inflation. The government has already started improving budgetary balance, he said: it curbed expenses by HUF 350 billion (EUR 910m) and postponed investments worth HUF 700 billion.
Thanks to the government’s successful handling of the coronavirus pandemic, Hungary is now considered one of the fastest-growing countries in the bloc, Minister Varga said. The investment rate was the second-highest in the EU last year, with investments totalling 12,000 billion forints, he added. Minister Varga said the government did not plan austerity measures or tax raises but was “mulling other incentives”. Responding to a question on whether the government would “allow local governments to take out loans”, Varga said the government would continue to review the local authority’s ability to pay back the monies before approving it. This year, 45 requests have already been approved, he said. The committee approved Varga’s nomination with 11 votes in favor and five abstentions.
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