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||-2.0||-1.8||-2.4||-2.3|
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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February 14, 2020
According to a preliminary reading released by the Hungarian Central Statistics Office (KSH) on 14 February, annual economic growth decelerated to 4.5% in Q4, down from Q3’s 5.0% expansion and marking the weakest reading since Q3 2017, but beating market expectations nonetheless.
February 13, 2020
According to a second estimate by the Statistical Institute, industrial production declined a working-day-adjusted 3.7% year-on-year in December, matching the first estimate and contrasting November’s revised 5.3% increase (previously reported: +5.7% year-on-year).
February 13, 2020
Consumer prices increased 0.9% over the previous month in January, after rising 0.3% month-on-month in December.
February 6, 2020
Industrial production fell a working-day-adjusted 3.7% year-on-year in December, contrasting November’s 5.7% rise, according to a first estimate by the Hungarian Central Statistical Office.
January 28, 2020
On 28 January, the Monetary Council of the Hungarian National Bank (MNB) kept the base rate on hold at a historical low of 0.90% and kept all other existing instruments unaltered, as had been largely expected.