Hungary’s proposed 2027 budget targets a deficit of 4.9% of GDP, down from a projected 7.5% in 2026, with planned cuts and a wealth tax intended to finance benefits and tax relief.
Finance Minister Kármán András said the draft assumes economic growth of 2.4% next year and government debt equal to 77.2% of GDP. The deficit figures are government projections, and the 2027 target depends on the proposed measures taking effect.
The government wants to carry roughly 700 billion forints in savings from its 2026 budget into 2027 and make another 1.5 trillion forints in cuts. It identified procurement, concessions, communications and public broadcasting as areas where it plans to reduce spending.
The proposed wealth tax would apply to people whose net wealth exceeds 1 billion forints, charging 1% on the amount above that threshold. The portion above 100 billion forints would face a 1.5% rate. The government expects the tax to raise 200 billion forints a year beginning in 2027.
The government estimates that tax cuts and measures for families, pensioners, sector pay raises and the Hugonnai Vilma health program would total more than 2.1 trillion forints. It presents the spending reductions and tax changes as a way to pay for those commitments, with wealth holders above the proposed thresholds bearing the new tax.
Before the draft was announced, International Monetary Fund staff estimated Hungary’s 2026 deficit at 7% to 7.5% of GDP. They said a credible package of revenue and spending measures could bring the shortfall to 5% or a little less by 2027.
ING EMEA FX and fixed-income strategist Frantisek Taborsky said profit-taking after a rally in Hungarian bonds had pushed yields higher. Although the deficit target was broadly in line with ING’s expectations, he warned that “the trade is currently too crowded,” leaving Hungarian assets exposed to a further correction.
The Magyar Nemzeti Bank (MNB), Hungary’s central bank, held its base rate at 5.50% on Oct. 20. It cited high energy prices and a rising global yield environment as reasons for caution and said Hungary’s fiscal path would influence future decisions.
The MNB is scheduled to publish abridged minutes of its Oct. 20 meeting on Nov. 4.
