The government calculates that next year economic growth will be four percent, inflation will be six percent, and the deficit target in relation to GDP will be 2.9 percent. The budget reserve is HUF 220 billion, and the cabinet’s aim is that if the GDP grows above the forecast, then the surplus income will be used to further reduce the deficit.
The value of the public debt index planned for December 31, 2024 may be 66.7 percent, after the 69.7 percent planned for the end of this year.
At the same time, the macro path outlined in the budget is particularly optimistic, and it is believed that the deficit target must be re-planned even before the budget year. In addition, the budget law does not include compensation for the central bank’s loss, which is a serious item and can be over HUF 400 billion.
The total expenditure of the central subsystem of public finances next year is HUF 40,755 billion, and the total revenue is HUF 38,240 billion. The deficit was established at HUF 2,514 billion. In 2024, according to the plans, the domestic operating budget will break even, with a total of 34,150 billion forints of income and expenditure.
The total expenditure of the European Union development budget in 2024 was set at HUF 3,605 billion, the total revenue at HUF 2,479 billion, and the deficit at HUF 1,125 billion.
Spending on debt service will increase next year: from HUF 2,541 billion this year to HUF 3,144 billion.
In 2024, the overhead protection fund will remain part of the budget with an allocation of HUF 1,340 billion instead of this year’s HUF 2,579 billion, of which HUF 917 billion is available for residential overhead protection. In addition to HUF 483 billion in support from the central budget, energy sector players contribute HUF 513 billion, airlines HUF 39 billion, and pharmaceutical manufacturers HUF 17 billion in the form of special taxes. Mining royalties amount to HUF 192 billion and telecommunications taxes contribute HUF 95 billion to the fund.
The national defense fund is also included in next year’s budget. Its budget will increase from this year’s HUF 842 billion to HUF 1,309 billion in 2024, which means that total spending on national defense will be more than two percent of GDP, which exceeds NATO expectations. The fund’s income comes from HUF 822 billion support from the central budget, as well as HUF 253 billion in payments from financial organizations and HUF 234 billion from insurance tax. Most of the fund’s resources are used to develop the capabilities of the air force, land capabilities, and military infrastructure.
When submitting the law, the finance minister said that next year more than HUF 3,300 billion will go to support families, HUF 3,430 billion to education, and pension expenses will exceed HUF 6,500 billion. The amount spent on babysitting support is increasing: instead of this year’s HUF 178 billion, this benefit will be HUF 226 billion next year. The budget includes HUF 449 billion for the reconstruction of the 13th month pension, and HUF 20.5 billion for the pension premium.
The budget of the health insurance fund exceeds HUF 4,423 billion after this year’s HUF 4,033 billion. Of this, HUF 2,550 billion can be used for curative and preventive care. 1,049 billion forints are included in the budget for subsidies to local governments, compared to 968 billion forints this year. Local governments must also pay a solidarity contribution, the amount of which will rise from HUF 237 billion to HUF 307 billion this year.
The government therefore adopted next year’s budget at the beginning of July, a little less than 6 months before the start of the next fiscal year, even though this year’s budget outlook is uncertain. The 2023 budget was amended even in March this year.
Cover image: Getty Images
