Hungary’s 2025 economic action plan unveiled: €9.8 billion to counter economic downturn 🔄

Although the figures and economic analysis clearly do not indicate that the government made good economic decisions in 2024, ministers now see 2025 as the big window of opportunity to emerge from the economic crisis.

The Hungarian Government’s economic policy in recent years has not shown any positive signs, with the weakening forint and inflation showing huge problems even in the most straightforward figures, and Orbán’s fight against the EU not helping Hungarian households. However, the government’s optimism has not waned, with the 2025 budget coming, which will now really boost the Hungarian economy, ministers say.

Varga: 2025 budget one of ‘new opportunities’

The government’s 2025 budget is one of “new opportunities”, Finance Minister Mihály Varga said on Monday, ceremoniously submitting the bill to lawmakers in parliament.

Varga said the “peacetime” budget reflected the government’s new economic policy. He added that outlooks were encouraging, with a “good chance” for the world to move toward peace based on the results of the United States elections.

Varga said Hungary’s GDP would grow in 2024, as higher wages boosted consumption. Based on forecasts from international institutions, Hungary’s GDP growth in 2025 could put the country among the frontrunners in the EU, he added.

The government aims to put the economy back on the growth path, while higher wages leave more money with families and SMEs are strengthened, he added.

read also: Forint strengthened, but the EUR/HUF exchange rate may exceed 500 in 2025

Varga said the budget bill aimed to support families, strengthen businesses, maintain the regulated utilities price system for households, preserve the value of pensions and ensure the country’s physical security.

The budget bill targets a 3.7pc-of-GDP general government deficit, while assuming GDP growth of 3.4pc and 3.2pc average annual inflation. Gross interest expenditures are set to reach 3.8pc of GDP.

Varga noted that the Fiscal Council had delivered a positive assessment of the budget bill and said all conditions were in place for fiscal compliance with conditions stipulated in the constitution.

Defence spending is targeted at HUF 1,753bn, or 2pc of GDP, in line with a pledge to NATO.

Spending on border protection, which has climbed to HUF 800bn since 2015, will rise by another HUF 40bn in 2025. Policing expenditures will increase to HUF 1,396bn.

The budget bill earmarks HUF 3,574bn for families with children, HUF 447bn more than in 2024. A dedicated fund for maintaining the regulated system of utilities prices has been eliminated from the budget, but HUF 880bn has been allocated for the purpose.

Pensions spending is set to grow to HUF 7,200bn, including the cost of an annual pensioners’ bonus, equivalent to a full month’s pension.

Spending on education has been raised by close to HUF 500bn to HUF 3,876bn, and HUF 3,717bn has been allocated for healthcare.

Varga noted that sectoral taxes on airlines, pharmaceutical companies and telecommunications companies had been phased out, while the advertising tax would be suspended for another year.

Reserves in the budget come to HUF 100bn.