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)||-2.6||-2.6||-1.9||-1.6||-2.2|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||2.03||0.0 %||Sep 04|
|Exchange Rate||298.6||-0.68 %||Sep 04|
|Stock Market||39,753||0.04 %||Sep 04|
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September 10, 2019
Consumer prices fell 0.1% over the previous month in August, contrasting a 0.2% month-on-month upturn in July.
September 6, 2019
Industrial production jumped a working-day-adjusted 8.7% year-on-year in July, which marked an acceleration from June’s 4.1% upturn and the fastest expansion since March 2017, according to a first estimate released by the Hungarian Central Statistical Office.
August 30, 2019
A second GDP release published by Hungary’s Statistical Office on 30 August confirmed that growth, in annual terms, slid to 4.9% in Q2 from 5.3% in the first quarter.
August 27, 2019
On 27 August, the Monetary Council of the Hungarian National Bank (MNB) held the base rate at a record low of 0.90% and kept steady all other existing instruments.
August 25, 2019
The GKI economic sentiment index, a composite indicator, shot up to 4.0 points in August after falling to 0.6 points in July.