The budget bill is being drafted at the Ministry for National Economy; it is expected to be finalized and submitted to the Government at the end of April and scheduled to be presented to the National Assembly already in May, Minister for National Economy Mihály Varga told public news channel Kossuth Rádió.

As the Minister noted, drafters of the 2017 Budget are working to factor in how employees could receive a part of their wages contribution-free. This will have some impact on revenues as well as the inflation rate, he added.

In the interview, which was recorded prior to the announcement of the outcome of S&P’s rating review, the Minister stressed that he was not expecting an upgrade, as S&P has been the only major credit rating agency in case of which Hungary’s rating outlook was stable instead of positive. Although rating agencies are well aware of favourable economic indicators, he remarked, they seem to attach more importance to factors they had formerly considered less significant and they leave more time to pass before a country can advance from non-investment to investment-grade category.

Speaking of a zero-deficit budget, Mihály Varga pointed out that the Government aims to operate the state without a deficit, and thus without having to take out market loans to finance public spending on, for example, defence, healthcare and environmental protection. The zero-deficit budget must be achieved while – potentially – GDP growth is kept around 3 percent and investment projects, such as the development of Paks II or the Budapest-Belgrade railroad, do not come to a standstill. In this case, he added, growth would be dampened and a smaller number of jobs could be created.

(Ministry for National Economy)