Work related to the re-planning of the budget is under way in the financial task force, Finance Minister Mihály Varga said on Kossuth Radio’s programme ‘Good morning, Hungary’ on Thursday.

The economic impact of the fight against the spread of the virus and the epidemic rewrites the entire budget, he stressed. The economy protection measures, including the postponement of the tax payment liabilities of businesses, the suspension of executions and auctions, and the debt repayment moratorium, require a budget that provides the necessary financial coverage.

He recalled that upon the adoption of the 2020 budget in 2019, they expected a modest world economic environment and a 4 per cent growth. He stressed that upon the re-planning of this year’s budget the task is to adjust the revenue and expenditure sides to the actual processes in the economy, and to prepare long-term measures which raise the funds that will be necessary for restarting the economy.

They are looking for the financial resources that will be able to restart the Hungarian economy, and later to keep up the speed that was characteristic in the months before, he added. Mr Varga highlighted that the results achieved in the Hungarian economy such as the jobs created must be protected.

The Finance Minister said there are items awaiting re-planning also on the expenditure side, for instance, due to the postponement of the Olympic Games. Mr Varga pointed out that the budget must be redrafted in such a way as to ensure that there is sufficient funding for all government measures. In addition to the protection of jobs, financial results such as a reduced sovereign debt and the attainment of a lower deficit must also be protected. The goal remains to keep the deficit of the budget below 3 per cent.

They originally planned a 1 per cent deficit for this year, but this figure can no longer be achieved. At the same time, there are reserves worth more than HUF 400 billion in the budget, meaning that there is scope for keeping the situation under control even with a deficit below 3 per cent. If, however, it is absolutely essential for restarting the economy, a higher deficit cannot be ruled out, the Finance Minister said.

(Ministry of Finance/MTI)