This is what the Hungarian Fiscal Council thinks about this year’s budget

The Fiscal Council on Wednesday said it has “no fundamental objections that would justify signalling disagreement” regarding the 2024 draft budget, however, it pointed to a number of risks surrounding the government’s GDP growth and fiscal deficit targets.

The Council noted that the 4.0 percent GDP growth projection was higher than the average of the domestic and international forecasts and relied on the contributions of higher household consumption, a dynamic increase in investment, and export growth that outpaced that of imports.

The growth target can be achieved “if external and domestic conditions develop favourably”, it said, but noted the negative impact of the war in Ukraine and the sanctions imposed in response, energy security problems in Europe and “prolonged” negotiations over Hungary’s European Union funding among risks. Achieving the growth target would also require private sector investment to compensate for the decline in public sector investment, and the increase in exports, supported by the resulting new capacities, would need to be “well over” the pace of growth on export markets.