Hungary Targets Budget Overhaul Following EU Funding Breakthrough

Hungary expects a long-awaited influx of European Union funds to stabilize its stagnating economy and rein in a ballooning deficit. Finance Minister Andras Karman confirmed on Tuesday that the release of frozen capital will allow the government to restructure its 2026 fiscal plan and reduce national borrowing costs.

The government intends to submit a revised budget to parliament by late August, aiming to replace what Karman described as unrealistic fiscal foundations left by the previous administration. While the European Commission estimates the deficit could reach 6.2% of GDP, the current finance ministry is conducting an internal audit to determine the precise scale of the gap. Officials expect the EU financial support to materialize in the fourth quarter of 2026.

To bridge the fiscal divide, the government will maintain existing special corporate taxes initially implemented under former Prime Minister Viktor Orban, despite earlier political pressure to phase them out. Karman noted that immediate removal of these levies would cause too severe a shock to the current budget. Instead, the ministry plans to audit corporate tax allowances and eliminate inefficiencies to bolster state revenue. Alongside these changes, a dedicated expert group will begin evaluating medium-term fiscal rules to ensure greater transparency in government spending.