Official: Hungary’s 2026 budget is set, economic recovery postponed to next year – UPDATE

The 2026 budget is based on peace and can rightly be called a “peace budget”, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Thursday.

Gulyás said the biggest beneficiaries of the budget would be families raising children. He said the budget draft was the result of “cautious planning”, assuming global economic and political changes, primarily the establishment of peace, would produce economic growth. He added that the budget would offer everybody the chance to “take a step forward”.

Gulyás said the system of regulated utility prices for households and the annual pensioners’ bonus would be maintained in the 2026 budget, while salaries would continue to rise and Hungarians in uniform would get a six-month premium.

He said fiscal deficit and state debt levels would decline, while inflation would fall. He added that changes to tax laws would be made to streamline the tax system.

Funding for announced family support measures have been factored into the budget, he added.

Meanwhile, Gulyas noted that the referendum on Ukraine’s accession to the European Union started earlier this week. All Hungarian citizens with a permanent address in Hungary will be mailed a voting slip on the question, he said.

He insisted that the European Union wanted to prevent the people from deciding on Ukraine’s EU accession.

Gulyas said that in Hungary, the people’s opinion would determine the country’s position on the matter.

“We can’t take responsibility for the other countries.”

He called on everyone to vote, saying the outcome would be key to the future of the EU and Hungary. A large turnout, he added, was of critical importance.

Gulyas said he had already voted “no” to Ukraine’s accession, “but those wanting to vote ‘yes’ will have the chance to do so.”

Answering questions, Gulyas said the government’s stance was clear on Ukraine’s EU accession. “It’s good if people can voice their opinions and the government sees that opinion as binding.”

The government’s stance is that “Ukraine’s accession in its current form would be harmful for the EU and tragic for Hungary,” he said.

Gulyas insisted that the Tisza party had manipulated a recording from nine years ago by editing out Prime Minister Viktor Orban’s statement that Ukraine’s EU membership was not on the agenda. “Despite the fact that Ukraine is not at fault in becoming a victim of a Russian attack, a fast-tracked [EU accession] procedure is unacceptable…” he said.

He said it was out of the question that Ukraine could comply with the requirements of EU membership “by any objective measure”.

Regarding EU funding, Gulyas said that the years since 2010 had been the busiest since the fall of communism when it came to the modernisation, development of hospitals, as well as equipment procurement. “But the government wants to revamp even more hospitals. And we will because Hungary is entitled to the EU monies, but they could be coming faster.”

Gulyas noted that the state secretary for health care last week “presented” hospitals where development plans are ready but reconstruction cannot start “because Hungarian MEPs, who earn some 2 million forints a month in Brussels, are working to prevent the renovation of those hospitals.”

Government Spokeswoman Eszter Vitalyos said that the last stretch of the M44 motorway was inaugurated on Tuesday, completing a 127km network of four-lane roads linking the southeastern town of Bekescsaba to the M5 highway. The length of motorways in Hungary has grown 1.5-fold since 2010, she added.

Gulyas said the election law could not be amended in the year before an election, so this would not happen. At the same time, he added that this rule did not apply to procedural rules.

In response to a question concerning the EU audit office having found problems connected with NGO financing, he said Brussels employed double standards. Whereas it was raising various requirements in countries that already guaranteed transparency, such as Hungary, it neglected to enforce some basic transparency requirements when it came to its own practices, he said.

He said that when the EU commissioner overseeing rule-of-law matters visited Hungary, he was asked to bring Brussels closer to “good Hungarian practices”.

In response to another question, he said the government was open to amending the law on central bank foundations.

He said that so far it had not been proved that the central bank foundations had failed to act with due caution in their business operations. When the government wanted to extend the powers of the central bank supervisory board to them, the “notification attempt” sent to the European Central Bank had not got anywhere, he added.

Gulyas said any significant loss of assets due to poor financial management was “unacceptable” and any breach of the law would not be tolerated. An investigation by the public prosecutor must reveal the facts, he said. Gulyas also noted that the central bank never operated under the auspices of the government.

Until 2018, State Audit Office had not found any irregularities regarding the financial operations of central bank’s foundations.

Commenting on the removal of Antal Rogan, the head of the Prime Minister’s Cabinet Office, from a US sanctions list, he said it was untrue that Rogan had been added to the list in connection with corruption and no such evidence was available. He added that evidence was available in the case of others included on the list, but the decision to blacklist Rogan had been political.

Gulyas said he was not aware of anybody ever having been on the list for less than 18 months, so the fact that Rogan had been removed in three months was an admission that his inclusion had been baseless.

He denied that the case had been connected in any way to the removal of some of his ministry’s powers. He added that the prime minister had decided that the minister in charge of the cabinet office and the prime minister’s office should be primarily involved in government coordination and preparations for the general election.

Commenting on bridge protests organised by independent MP Akos Hadhazy, Gulyas said police banned the demonstration and they now awaited a related court ruling, adding that a few hundred protesters must not be allowed to curb the rights and freedoms of hundreds of thousands of people. If the Kuria, Hungary’s supreme court, “takes a different position”, further legal steps would be considered, he said.

Gulyas confirmed that the Hungarian section of the Budapest-Belgrade railway line is expected to be completed by the end of the year. The line is 91 percent complete technically and 72 percent complete financially, the economy minister added.

Asked whether Hungary would be represented at the May 9 Moscow Victory Parade, Gulyas said it was “out of the question” that the Hungarian government would be represented at a political level, adding that the event celebrated had not been a victory for Hungary.

Responding to a question about a ministerial commissioner who insisted that moving abroad “is treason”, Gulyas said his statement did not coincide with the government’s position, namely that anyone who “tries their luck in another country should be appreciated”. He said it was up to the defence minister to decide whether or not to accept the commissioner’s resignation, should he proffer it.

Regarding reported nickel contamination in the town of God, north of Budapest, he said it was up to the authorities to investigate if the suspicion of contamination arose, and the polluter would face the consequences stipulated in the law if found responsible.

Government approves main figures of 2026 budget

The government has approved the main figures of the 2026 budget, National Economy Minister Márton Nagy said after the cabinet meeting. At the press briefing, Nagy said the budget draft would be sent to the Fiscal Council in the coming week and submitted to lawmakers on 2 May. Expenditures are close to HUF 35,000bn and revenue around HUF 34,000bn in the draft, he added.

The draft targets a 3.7pc-of-GDP deficit, he said. Calculated with the European Union’s accrual-based accounting rules, the deficit target stands at HUF 3,700bn, while the cash flow-based gap is set to reach HUF 4,100bn, he added. The draft budget assumes GDP growth of 4.1pc and average annual inflation of 3.6pc.

In absolute terms, GDP is set to rise to HUF 95,000bn from HUF 88,000bn in 2024. The chance of peace gives the government the chance to return to a policy tax cuts, a policy that will be focused on families, he said.

Fielding questions, he said the 2024 4pc-of-GDP deficit was achievable, adding that the primary deficit would be zero. He said the deficit target was raised on the extension of personal income tax exemptions for mothers and VAT rebates for pensioners. He added that payouts on government securities and support for the regulated utilities price scheme during the winter months had weighed on fiscal expenditures early in the first months of the year.