Hungarian Finance Minister András Kármán presented the government’s 2027 budget plan at a background briefing on Tuesday afternoon. He projected a cash-flow deficit of 5.2% of GDP and an ESA deficit of 4.9% of GDP for next year.
Government expenditure is set to fall from 51.2% to 47.3% of GDP, and the reduction will come mainly from spending cuts. Ministries’ operating spending is to be cut by 10% and capital spending by 20%.
Revenue measures and freed-up funds
The plan includes a wealth tax, higher corporate income tax for large companies, an effective advertising tax, and changes to the insurer special tax and the financial transaction duty. The bank windfall tax stays unchanged. Funds freed up by the cuts would go to wage increases, a doubled family allowance, a pension supplement, and a tax credit of up to twice the minimum wage.
The 2026 revised deficit target is 7.5% of GDP. Gross wage growth for 2026 is 9.2%.
Minister’s case for spending-side adjustment
Kármán said significant deficit reduction would be achieved next year. He described it as an expenditure-side consolidation, arguing that adjustments to current spending tend to be sustainably successful.
Related: Hungary cuts minimum-wage income tax to 9% from 2027 · Eurasia Group sees Hungary's 2026 deficit at 7.7-7.8% of GDP
