Hungary's 2026 Deficit Could Reach 7.5% of GDP, Finance Minister Warns

Hungary's budget deficit for 2026 could climb to 7.5% of gross domestic product, according to Finance Minister Andras Karman. The projection, shared in a Facebook post on Thursday, would mark the highest shortfall in the European Union and exceeds the government's earlier guidance of more than 7%.

The warning comes despite monthly surpluses totaling roughly 1 trillion forints ($3.2 billion) since Prime Minister Peter Magyar's election victory in April. Data released on Monday showed the deficit narrowing to 2.858 trillion forints in the first seven months of the year, about two-thirds of the full-year target, after a pre-election spending surge under former Prime Minister Viktor Orban.

Karman cautioned that some favorable factors behind July's budget performance may prove temporary, as expenditure not booked last month could still fall due later in the year. Public finances are also under pressure from rising electricity import costs following lower output at Hungary's only nuclear power plant, which could boost government spending by 100 billion to 200 billion forints.

Magyar's government has pledged to submit a revised 2026 budget to parliament by the end of August following an audit of public finances. The government will then unveil a medium-term fiscal plan setting out Hungary's path towards meeting euro adoption criteria by around 2030.