Finance Minister Mihály Varga said the public utility price cut protection fund and the defense fund are necessary to ease the burden on families, preserve the government’s achievements and, in response to the war situation, to guarantee the country’s peace and security.
Minister Varga told public broadcaster Kossuth Rádió on Sunday that in 2019, before the outbreak of the pandemic, the budget projected a 1 percent deficit but the numbers had to be revised due to the crisis. High energy prices, rising inflation and the increasing interest expenses of the debt service have significantly increased expenditures, he said, but the government is committed to restoring fiscal discipline. Next year’s draft budget will ensure that both the deficit and the government debt will fall in 2023, to 3.5 percent (of GDP) and 73.8 percent, respectively, Minister Varga said. The public utility price cut protection fund and the defence fund are planned for two years, 2022 and 2023, he said. The public utility price cut fund is projected to total HUF 670 billion next year and the defence fund HUF 842 billion. With the latter, Hungary will achieve its goal set earlier as a NATO commitment of spending at least 2 percent of GDP on defence by 2024 already next year as defence expenditures will well exceed HUF 1,300 billion, Minister Varga said.
Minister Varga said Hungary’s public utility price cut scheme, in place since 2013, is facing a great challenge now due to high energy prices and inflation. The government has decided to maintain this system; payments from the public utility price cut fund must serve the purpose of maintaining energy prices at their current low level for families, he said.