Next year’s budget deficit revised upwards
December 31st, 2022A left-wing commentator lambasts the Fiscal Council of Hungary, which has approved the amendments to next year’s budget, albeit with several reservations.
In view of the unfavourable market trends of the second half of the year, the government has thoroughly revised the 2023 budget which was adopted by Parliament in July, increasing the expected public deficit from 3.5 to 3.9 percent. This is possible under the special ‘state of war emergency’ enacted after the Russian invasion of Ukraine. The Financial Council, a three-member body tasked by Parliament to oversee the budget, decided not to block the amendments but called upon the government to submit it to Parliament within a month.
In Népszava, Zsolt Papp finds it telling that National Bank President György Matolcsy, one of the three members of the Financial Council, refused to sign the document. (In early December, Matolcsy told a Parliamentary committee that he disagrees with the government on how to tackle the crisis and how to curb inflation.) In addition to the risks concerning inflows and expenditures, Papp finds it outrageous that the government decided to amend the budget without discussing the changes in Parliament. He thinks the Financial Council should have blocked the amendment rather than expressing vague misgivings. He calls the two signatories ‘chinovniks (civil servants in Russia) of the regime’ and believes that the government only decided to submit the budget amendments to Parliament for eventual approval because Hungary is under rule-of-law oversight by the European Commission.
In a statement to Világgazdaság, Árpád Kovács, Chairman of the Financial Council said Mr Matolcsy’s signature is only missing from the report on the budget because the President of the National Bank was abroad during the final session and was represented by his deputy, who had no right to sign the document in his place.