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Public deficit forecast to reach 5.2 percent of GDP

October 6th, 2023

A left-wing analyst blames the government for higher-than-expected inflation and public deficit.

The government announced on Tuesday that the originally planned 3.9 percent deficit in public finances has become untenable this year and set the new target at 5.2 percent of GDP – which is still one percentage point below last year’s deficit. In an unusual exchange of accusations earlier this week, the government and the National Bank laid the blame on each other’s doorsteps.

In Népszava, economist Péter Róna sides with the National Bank in the dispute, but without mentioning it by name. He believes both the slight recession Hungary for the past year and the double-digit inflation rate are due to irresponsible government spending. He suggests that Hungary cannot emerge from its current crisis within the economic paradigm the government represents. Róna accuses the government of supporting big business owners instead of redirecting revenues toward the bulk of the population. Employees, he writes, have a mere 40 percent of the national income, rather than at least 66 percent as in western countries.

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