Government Sets 7.5% Deficit Target for 2026

The government is setting a 7.5% of GDP deficit target in Hungary for 2026 and will submit a legislative proposal on August 31 to modify the budget bill, the Finance Ministry said on Monday.

The ministry stated the inherited economic situation, and the costs of the drought and energy crisis do not yet allow for a further reduction in the deficit target this year.

This shows the severity of the inherited situation and that the mistakes and bad decisions of the previous sixteen years cannot be corrected in a few months, the ministry added.

The ministry emphasized that the government is committed to reducing the public debt ratio, however, due to the inherited high deficit and a nominal GDP significantly lower than planned by the previous government, the debt ratio is expected to increase from 74.6% to 77.5% of GDP in 2026. The government will announce a specific medium-term plan in October on reducing the debt ratio after 2026, in parallel with the 2027 budget bill, the ministry said.