In a move to avoid financial monitoring by the EU, the Hungarian government plans to freeze HUF 110bn in spending at some of its institutions, the country’s economy minister, Mihaly Varga, said this week. The European Commision warned Hungary this month that it may be placed back under EU budget control next spring for failing to reduce its public debt.
“We’ll do whatever is necessary so that we won’t return to the excessive deficit procedure and thus stop receiving EU funds,” Varga said during a Association of Hungarian Economists conference, adding that lower-than-expected inflation has negatively impacted budget revenues.
Inflation is expected to average 1 percent this year. Varga said the country’s public debt, which was at 84.4 percent of GDP in March, will fall slightly this year. However, economists predict it will remain around the 80-percent mark.
