The cost of new government measures is balanced out by steps to end "overpricing and waste", keeping the 2026 deficit target at 7.5% of GDP, Finance Minister András Kármán said in a social post on Sunday.
Karman said newly launched measures, including start-of-school support for around 400,000 children, a VAT exemption for prescription medicines and a reduction in the VAT rate for firewood, would add 0.2% of GDP to the deficit, while a contingency fund to manage the impact of drought would add 0.5%.
He added that they broke with the previous government’s wasteful practices based on overpricing and are pursuing a responsible fiscal policy. Through a meticulous review of contracts and responsible financial management, they will reduce the deficit by more than HUF 700 billion, or 0.7% of GDP this year alone.
These government steps to reduce spending included scaling back infrastructure projects, shutting down the Sovereignty Protection Office and cutting MPs' pay.
András Kármán pointed out that – as if droughts, floods, or hailstorms could never occur – the previous government had not budgeted a single forint in reserves for 2026. Therefore, to address extreme weather conditions, the Tisza government established a HUF 500 billion Emergency Fund, equivalent to 0.5% of GDP, although it has not yet been necessary to spend any of it.
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