Fiscal Balance in Hungary
Hungary - Fiscal Balance
Government unveils long-awaited fiscal package
On 1 March, the government announced its Structural Reform Programme, which is a set of reform bills aimed at reducing the fiscal deficit by HUF 900 billion (around 3% of GDP) annually by 2014. With the implementation of the programme, the Orban administration projects that the fiscal deficit will fall to 1.9% of GDP (2010: 3.8%) and public debt will shrink to between 65% - 70% of GDP (2010: 78.9%) by 2014. In addition, the government finally committed itself to keeping the deficit below the 3.0% of GDP threshold this year, as determined by the Maastricht Treaty. The measures outlined in the programme will be gradually implemented in the coming years and revolve around seven key areas, namely: employment and labour market, pension system reform, public transport, education, drug subsidy system, state and municipal funding, and contributions to the fund established to reduce public debt. The lion's share of the deficit reduction comes from projected savings, in particular from cuts to unemployment benefits and a reform of the drug subsidy system. Only about 25% of the total is projected to come from increased revenues, most notably from the extension of the current bank tax rate until to 2012, an additional year than initially intended. The announcement of the fiscal tightening measures was welcomed by the market, in particular as preliminary budget figures showed deteriorating public sector figures, with the cash balance deficit reaching 84.1% of the full-year target in February. Although most analysts broadly share the Economy Ministry's view that February's dismal reading mostly reflected seasonal factors such as lower tax revenues and large interest coupon payments they point to the figure as a strong case for further fiscal tightening measures.
Hungary - Fiscal Balance Data
|Fiscal Balance (% of GDP)||-2.0||-1.8||-2.5||-2.1||-2.0|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||2.08||0.0 %||Dec 31|
|Exchange Rate||295.1||-0.68 %||Jan 01|
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July 29, 2022
According to a second estimate by the Statistical Institute, industrial output expanded 3.4% year on year in May (April: +4.7% yoy).
July 28, 2022
The GKI economic sentiment index, a composite indicator, fell to minus 9.4 in July from minus 7.5 in June.
July 28, 2022
At its 26 July meeting, the Monetary Council of the Hungarian National Bank (MNB) raised its base rate to 10.75% from 9.75%, marking the 15th consecutive increase.
July 8, 2022
Consumer prices increased 1.47% over the previous month in June, a smaller increase than May's 1.65% rise.
June 30, 2022
At its 28 June meeting, the Monetary Council of the Hungarian National Bank (MNB) decided to raise its base rate to 7.75% from 5.90%, marking the 13th consecutive increase.