Public finance deficit reached 6.7 percent in 2024
April 4th, 2024Based on the final 2024 deficit figures released on Tuesday, a business analyst predicts public expenditure cuts as the government intends to continue reducing the public debt rate.
In Portfolio’s podcast on the state of the economy, market analyst István Madár finds it worrisome that the public finance deficit has exceeded 6 percent for the fourth consecutive year. When the Covid pandemic struck, he explains, the government was forced to abandon its ten-year-long course of reducing the rate of public debt. From 65 percent of GDP, the debt rate swiftly jumped back to 80 percent. Since then, it has sunk to 73, but this year’s plan to reduce it further will require severe measures, he believes. Madár doesn’t expect extra taxes on enterprises, as some of the earlier windfall taxes are still in force and are already under EU scrutiny. He therefore suspects that the government will cut back public investment projects, although not before the European and municipal elections to be held in June. As parliamentary elections will take place in two years’ time, Madár believes that in 2025, the government will be tempted to increase public spending and predicts therefore that Hungary will have to live with high public deficits for several years to come.