The Hungarian government to submit 2024 draft budget soon

The government will submit the 2024 draft budget to parliament on May 30, with a vote scheduled for July 7, the head of the Prime Minister’s Office said on Thursday.

Despite the challenges surrounding the drafting of the budget such as the ongoing war in Ukraine, the government is keeping to its practice of submitting the budget bill during parliament’s spring session, Gergely Gulyás told a regular press briefing. This ensures predictability and sets the government’s economic policy goals for next year, he added.

The budget aims to guarantee the country’s security, protect families, pensions and jobs, as well as the cap on household utility bills, Gulyás said. It must calculate with the possibility of a protracted war, but it is important that the government’s goals are maintained and that the budget deficit and the public debt are reduced, he said, adding that the draft budget will target a deficit of 2.9 percent of GDP.

The government plans to submit the draft budget to the Fiscal Council on around May 20, he said.

The bill was drafted with the war in mind, Gulyás said, adding that peace and a phasing out of sanctions would greatly increase the budget’s room for manoeuvre, making the country’s situation much easier.

During times of war, the defence budget has to be increased, he said. Amid these circumstances inflation is higher, too, he said, adding that the government continued to urge an immediate ceasefire and peace talks.

Meanwhile, Gulyás said the government is renewing frozen interest rates for retail borrowers and small and medium-sized businesses, and will keep the policy in place until the base rate drops to below 10 percent.

He noted that the interest rate freeze on retail loans was introduced in January 2022 and expanded to SMEs in November.

The rate of inflation and, consequently, the base rate make it impossible to scrap the measure, he said.

As soon as the central bank base rate drops to below 10 percent, the government will phase out the freeze on interest on loans. The government expects inflation to fall into single digits by the end of the year, he noted.