Hungary’s government forecasts most of the country’s economic indicators will be favourable in 2024, which next year’s budget is based on.
The majority of analysts believe the economy is on the brink of a positive shift and could revert to over 4% growth next year.
One of the key points of the 2024 budget is reducing the public deficit to 2.9% of GDP, Hungary Today reports.
Although the EU suspended the Maastricht criteria on public deficit requirements for three years after the pandemic outbreak in 2020, member states will have to comply with the Maastricht requirements again once again from 2024. This means the public deficit must remain under 3%.
The National Assembly has set the expenditure headline for the central sub-system of the general government at HUF 40,755 billion (€104.3 billion), the revenue headline at HUF 38,240 billion (€97.8 billion) and the deficit at HUF 2,514 billion (€6.4 billion) for next year.
With May’s deficit the fifth lowest monthly deficit in seven years, Hungary’s government has set a fiscal target of 2.9% for next year. According to the chairman of the Fiscal Council, Árpád Kovács, there are several risks associated with the budget, such as lower-than-forecast GDP growth, a potential lower-than-expected revenue out-turn, and an ongoing delay in EU funds disbursement.
“Experts at the central bank expect economic growth next year to be between 3.5% and 4.5%, with most analysts also expecting the Hungarian economy to expand above 4% on a sustained basis from 2024,” he stated.
Furthermore, a substantial rise in GDP is also likely following a series of large-scale investments announced over the past few years. This could lead to an acceleration in economic growth in the medium term, the Hungary Today report adds.
NBH Bank analysts predict 1% economic growth in 2023, with senior analyst Gergely Suppan commenting: “Agriculture is likely to perform better this year than in 2022, due to the severe drought, with the outlook being much more promising now than a year ago due to more precipitation.”
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