Budget decree issued: a deficit of transparency

HUNGARY - In Brief 02 Jan 2023 by Istvan Racz

---

Just as expected, the government issued its decree to amend the 2023 budget on December 29. However, the decree did not include the whole set of documents, which are usually delivered to parliament for the discussion of annual budgets. As they have said, the budget will be handed in for ex-post approval to parliament in January. Missing details and background documents will likely be published on that occasion. But for now, the general government's full budget in both accrual and cash terms is not publicly known. The media has reported that the main deficit target, the one set for the general government in accrual terms, is raised slightly, to 3.9% of GDP, but we only know that from the Fiscal Council's report, rather than from official communication by the government. (The Fiscal Council is an independent body, which is legally required to give parliament an opinion on any budget plans coming from the government.) What was included in the decree was only the central government's projected budget in cash terms. And in that one, the deficit target was raised to HUF3400bn or 4.7% of GDP, from the original HUF2352 bn or 3.2% of GDP target figure. At this moment, it is unclear how on earth the government would manage to reconcile the new cash-flow target for the central budget with the main deficit target, especially as the letter only went up from its original level by 0.4%-point of GDP. But anyway, the government's goal regarding the gross debt ratio is that it would go down from 76.8% of GDP at end-2021 to 74% at end-2022 and further to 70.2% at end-2023. Consequently, a distinct downward trend could be maintained regardless of moderate shifts, up or down, in the defici...