Hungary’s 2026 budget faces significant growth risks, council flags global uncertainty
The Fiscal Council raised no fundamental objections to the government’s 2026 budget draft, but did point to risks affecting targets amid increased uncertainty in the global economic environment in an opinion issued on Monday.
Lower-than-expected first-quarter GDP and global trade tensions pose risks for achieving the 2.5% economic growth target in 2025, the Council said. High tariffs could impact Hungary’s export sector unfavourably, while the uncertain outlook could weigh on investment activity, it added.
The Council said that the continued increase in domestic consumption, driven by high employment, higher real wages and government measures boosting households’ net incomes, would mitigate those risks.
The Council said that deviations from macroeconomic assumptions could trigger a review of an earlier agreement on minimum wages reached between employers, unions and the government. The Council acknowledged the 3.7%-of-GDP accrual-based deficit target for 2026, paired with a primary deficit of zero, but said the gap should still be brought under 3%.
The Council also highlighted the risk of lower revenue related to underperforming GDP and uncertainty surrounding transfers from Brussels. It added that the HUF 50bn of reserves in the budget for extraordinary government measures was lower than in earlier years and recommended raising the amount.
In a statement released later on Monday, the National Economy Ministry said the government saw no reason, at present, to review the macroeconomic assumptions in the budget draft, but could revisit them in the summer. The government will act on the Council’s recommendation regarding reserves for extraordinary government measures and raise them from HUF 50bn to HUF 192bn while cutting overall expenditures by the same amount to keep the budget balance unchanged, it added.
The government will submit the 2026 budget bill to lawmakers on 6 May.
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