Hungary’s Ministry of Finance announced on Monday a budget deficit target of 7.5% of gross domestic product for 2026, reflecting inherited fiscal challenges, a severe drought, and an ongoing energy crisis that have limited the scope for deeper deficit reductions.
The government outlined measures expected to reduce the fiscal gap by 700 billion forints, equivalent to $2.25 billion, by year-end. However, a newly established 500 billion forint crisis fund, designated to address drought and energy-related pressures, will absorb a significant portion of these savings.
Public debt is projected to rise to 77.5% of GDP in 2026, according to the finance ministry, though officials anticipate a gradual decline in the medium term under the country’s fiscal plan.
Prime Minister Peter Magyar’s administration faces balancing fiscal consolidation with emergency spending amid the dual crises, which have strained the economy and constrained policy flexibility.
