Hungary's Gov't Raises 2023 Deficit Target

In 2022, the government deficit was 6.2 percent of gross domestic product (GDP).

"The current precarious global scenario places an extraordinary burden on Hungary's budget," the ministry said.

Beyond the high costs associated with the country's energy subsidy measures, it also said that the government will increase its defense spending to 2 percent of GDP this year.

Moreover, Hungary seeks reimbursement from the European Commission for border defense expenses incurred in safeguarding the European Union (EU) borders totaling 650 billion Hungarian forints (1,746,000,000 U.S. dollars), the ministry said, adding that if the Commission honored Hungary's request, the deficit would be reduced by around 1 percent.

"Furthermore, disbursement of EU support rightfully due to Hungary by the European Commission would expand the maneuverability of the Hungarian budget," the ministry said.

It added that "Hungary's outlook is promising due to the stable underpinnings of the country's economy."

"The government will persist in improving balance indicators and sustaining a diminishing deficit and debt trajectory annually."

For 2024, the government expects the deficit to fall back to 2.9 percent of GDP, Finance Minister Mihaly Varga said at a conference in Budapest.

He said he expected the economy to bounce back from recession before the end of the current year.

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