European Commission Approves Hungary's Four-Year Fiscal Plan
Hungary aims to exit EU's fiscal surveillance by 2026 following approval of its new budgetary strategy.
BRUSSELS — The European Commission has officially approved Hungary's medium-term fiscal-structural plan, paving the way for the country to exit the EU's additional surveillance regime for overspending nations by 2026. This approval came after Hungary submitted updated information, addressing previously missing data required by the bloc's executive.
According to the newly submitted plan, Hungary's fiscal deficit is projected to decrease to 3.6 percent of GDP in 2025 and further down to 2.5 percent in 2026, both figures falling below the EU's established deficit threshold of 3 percent.
Furthermore, the country's overall debt is forecast to stand at 68.2 percent of GDP by 2028.
In response to the new assessment, EU envoys opted to delay the finance ministers' vote on earlier recommendations for Hungary, moving it to February.
This decision was made in light of the Commission's reassessment, which suggested a more favorable fiscal outcome.
The updated plan, based on data provided by Hungary on December 20, indicates a stronger initial fiscal position with higher inflation and an improved budgetary situation from January to November 2024. This was attributed to higher-than-expected non-tax revenue and slightly lower expenditure.
Despite these positive signs, the Commission noted the absence of a fully detailed fiscal strategy in the plan, highlighting the presence of several unquantified deficit-increasing measures across various sectors.
Hence, further fiscal measures may be necessary to meet the agreed commitments.
Aligning with the EU's common priorities, Hungary's plan includes 132 reforms and investments, over half of which are expected to receive funding through EU programs.
As part of its ongoing compliance, Hungary is required to submit a detailed report by the end of April, outlining the measures it has implemented to achieve the EU's fiscal targets.
According to the newly submitted plan, Hungary's fiscal deficit is projected to decrease to 3.6 percent of GDP in 2025 and further down to 2.5 percent in 2026, both figures falling below the EU's established deficit threshold of 3 percent.
Furthermore, the country's overall debt is forecast to stand at 68.2 percent of GDP by 2028.
In response to the new assessment, EU envoys opted to delay the finance ministers' vote on earlier recommendations for Hungary, moving it to February.
This decision was made in light of the Commission's reassessment, which suggested a more favorable fiscal outcome.
The updated plan, based on data provided by Hungary on December 20, indicates a stronger initial fiscal position with higher inflation and an improved budgetary situation from January to November 2024. This was attributed to higher-than-expected non-tax revenue and slightly lower expenditure.
Despite these positive signs, the Commission noted the absence of a fully detailed fiscal strategy in the plan, highlighting the presence of several unquantified deficit-increasing measures across various sectors.
Hence, further fiscal measures may be necessary to meet the agreed commitments.
Aligning with the EU's common priorities, Hungary's plan includes 132 reforms and investments, over half of which are expected to receive funding through EU programs.
As part of its ongoing compliance, Hungary is required to submit a detailed report by the end of April, outlining the measures it has implemented to achieve the EU's fiscal targets.
