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Finance minister submits draft budget focusing ensuring security, growth

Hungary's finance minister on Tuesday submitted the government's draft 2023 budget to parliament, declaring the bill would "protect the government's achievements, ensure the security of Hungarian families and keep the economy on a growth path."

The budget had been calculated with an economic growth target of 4.1 percent of GDP, a budget deficit target of 3.5 percent, and a public debt level of 73.8 percent of GDP by the end of next year, Mihaly Varga told a press conference before handing over the proposal to Speaker of Parliament Laszlo Kover. Inflation is expected to average 5.2 percent in 2023, he added.

The government has taken into consideration the impact of the Ukraine war and sanctions against Russia while drafting the budget, as well as high inflation, a slowdown in the European economy and global economic uncertainties, Varga said, adding that “the environment of the budgeting process has never been as unpredictable as at the current time”.

The minister noted that two new funds appeared in the draft budget drawing on revenue from the taxes on extra profits: a 670 billion forint (EUR 1.72bn) “general protection fund” and another defence fund totalling 842 billion (EUR 2.16bn).

The first will ensure that Hungarians “do not pay the price of the war in the new world economic environment”, he said, while the second will ensure that the government hits its commitment to NATO to expedite the boost in defense spending to end-2023.

An extra 730 billion forints will be spent on pensions, while education and health care will receive additions of 200 billion and 100 billion forints, respectively, he said.

Support for families will exceed 3,200 billion forints in 2023, with 450 billion forints more in spending in this area than this year, he added.

Varga said the Fiscal Council had approved the bill, declaring that it complied with the requirements of the constitution.

The finance minister said the government expected local councils to manage their finances soundly and contribute to “a balanced distribution of burdens”.

Varga said he was confident that talks with the European Union would conclude soon, and an agreement would be reached on recovery fund resources for Hungary.

Kover said the final vote on the budget is scheduled for July 15-18, and the general debate will start on June 21.

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