Hungary's budget deficit is likely to remain high in the coming years. Prime Minister Viktor Orban said that until 2027, the country will maintain new debt of about 5 percent of gross domestic product, APA reported, BTA reported.
“Budget planning is solid“, Orban said in an interview with state radio today. According to him, the deficit is expected to be around 5 percent in both 2025 and this year, and “the same will probably apply to next year”. European Union rules cap the budget deficit at 3 percent of GDP.
The statement came amid high government spending ahead of parliamentary elections scheduled for April. Last week, Orban argued against the need for sharp spending cuts after the vote, saying the deficit should be reduced “calmly, slowly and gradually,” provided the economic outlook improves.
Economic stagnation and election pressure
Orban, who has ruled since 2010, is facing one of his most serious political tests. Polls show that the centrist Tisza party ahead of the ruling party „Fidesz".
Hungary has been hit by a prolonged economic stagnation and has experienced the highest price increase in the European Union since the Russian invasion of Ukraine.
International rating agencies „Fitch“ and „S&P Global“ have already set the country's credit outlook as „negative“. According to „Fitch“, election spending this year could reach 2.1 percent of economic output. The agency warned that it could downgrade Hungary's rating if the government debt continues to rise or if a credible deficit reduction strategy is not presented.
According to the rating agencies, Hungary's government debt is the highest in the European Union among countries outside the eurozone.