The 2024 budget is a defence budget because during times of war, Hungary needs a budget that guarantees its security, protects families, pensions, jobs, and reduces utility costs, Minister of Finance Mihály Varga stated ahead of the parliamentary debate on the 2024 budget on Tuesday.

In his remarks, the minister emphasised that ‘an increasingly protracted and brutal war is taking place in Ukraine,’ and in such times, stability and predictability are of paramount importance. It is important for both families and businesses, as well as affected institutions, to learn about the government’s prospects, planned steps, and main objectives for the coming year as soon as possible. Therefore, the government follows the practice established nine years ago by submitting the budget for the next year to parliament in the first half of the year. He highlighted that unexpected events continuously occur during wartime, and instead of ‘waiting for the storm to pass, we must adapt to the stormy conditions.’ That is why the government has planned a budget that takes into account known risks, especially the prolongation of the war. The 2024 budget is therefore a defence budget because during times of war, Hungary needs a budget that guarantees its security, protects families, pensions, jobs, and reduces utility costs. He added that the focus of next year’s budget is on the strengthening of utility cost reduction and defence.

According to Mihály Varga, Hungary has to face challenges on multiple fronts.

The protracted war is compounded by the fact that misguided Brussels sanctions have caused a severe energy crisis in Europe. As a result, Hungary’s energy bill has increased, and utility cost protection represents an additional burden of over a thousand billion forints for the country. He emphasised that in this crisis-ridden, hopefully transitional period, the main task is to defend and maintain the achievements already reached, and the fundamental pillars of the government’s value-based policy remain unchanged. Financial stability is essential for security, which requires both a well-performing economy and budgetary discipline. He said that the government has developed the budget proposal for next year in line with these goals, making it suitable to guarantee the country’s economic and physical security while protecting the achievements made since 2010, amid improving macroeconomic indicators.

He explained that the 2024 budget proposal maintains the utility cost reduction system for the defence of the economy and families, ensures the necessary resources for the country’s physical security, sustains the family support system, protects the achieved full employment, supports further job creation, promotes investments, innovation, and balanced territorial growth to lay the foundation for future economic performance. It preserves the purchasing power of pensions, guarantees the full disbursement of the fully restored and increased 13th-month pension, and ensures the financial appreciation of public sector workers.

Mihály Varga also mentioned that after the temporary slowdown this year, the government expects dynamic growth again in 2024, based on the economic achievements having been protected even in times of crisis, allowing for the continued catching up of the Hungarian economy. The minister reiterated that the government is committed to reducing inflation to single digits by the end of this year, pushing it down to around 6 per cent in 2024.

The government expects a GDP growth of 4 per cent for 2024, while the debt-to-GDP ratio will be reduced to 69.7 per cent this year and to 66.7 per cent next year. The budget deficit target for 2024 is 2.9 per cent of GDP in 2024.

Mihály Varga announced that

the defence fund within the budget will ensure the continuation and acceleration of military development.

He emphasised that the government is presenting a budget to parliament that guarantees Hungary’s physical and financial security in the post-pandemic, war-torn, and sanction-ridden situation. Family support schemes will continue next year, pensions will be adjusted for inflation, and 13th-month pensions will be paid.

The finance minister highlighted that the most important task during the Russo-Ukrainian war and the Brussels energy sanctions is to preserve Hungary’s peace and security, ensure the country’s energy supply, and protect utility cost reductions.