The National Economy Ministry announced on Thursday that the government has decided to activate a national escape clause, allowing an increase in fiscal expenditures while remaining within European Union budget rules..
By activating the clause, the ministry said Hungary's budget expenditures may rise, over thresholds set jointly with the EU, to a degree level with the increase in defense spending from a 2021 base, up to 1.5pc of GDP.
As Hungary has raised its defense spending significantly over the past five years, in line with a commitment to NATO, the increase in expenditures allowed under the national escape clause may apply to both defense and non-defense expenditures, it added.
The government has renamed a "Defense Reserves" item in the 2026 budget to the "Economic Development Framework" and will activate it, allowing additional, targeted expenditures that are not contained in the current budget act, the ministry said.
In addition to topping up and tapping the Economic Development Framework, the government remains committed to reducing the budget deficit and cutting state debt levels, it added.
As well as preserving fiscal stability and maintaining strict fiscal discipline, the government aims to achieve the highest possible degree of economic growth, the ministry said.