Hungary's budget deficit rises to 6.2% of GDP: Spending increases by 10.8%

Hungary's government posted a deficit of 2,809.5 billion forint in the first half of 2026. That represents 6.2% of economic output, the Hungarian Central Statistical Office (KSH) reported on October 1. In the first half of 2025, the deficit stood at 310 billion forints, or 0.7% of GDP.

Expenditures are growing four times faster than revenues

Revenues rose to 19,018.1 billion forints, an increase of 2.9%. Expenditures rose to 21,827.6 billion forints, an increase of 10.8%. Personnel expenses accounted for the largest share: they grew by 1,044 billion forints, or 23.1%.

The math is simple: for every forint of revenue, there is approximately 1.15 forints in spending. The government is financing the shortfall through borrowing. Government investments, on the other hand, fell by 311 billion forints, a decrease of 21.5%. The first quarter accounted for 2,051.3 billion forints of the deficit. In the second quarter, it amounted to 758.2 billion forints, or 3.3% of GDP.

By subsector, the burden falls on the central government, which posted a deficit of 3,106.5 billion forint. Social security recorded a deficit of 16.1 billion forint. Local governments achieved a surplus of 313.1 billion forint.

Forecast for 2026 rises to 6,902 billion forints

The Hungarian Ministry of Finance has raised its annual forecast. It now expects a deficit of 6,902 billion forints for 2026, up from the previous estimate of 4,745 billion forints. This corresponds to 7.5% of GDP. The original projection was 3.7%. According to the ministry, without countermeasures, the deficit would have reached 8.3%.

Finance Minister András Kármán said on September 8: “Even in the short term, a deficit of 7.5% is unacceptable.” The quote has been translated from Hungarian. He announced a significant reduction for 2027. To achieve this, the budget calls for targeted spending cuts, a new reserve fund, and a social package worth 63 billion forints.

What this means for German exporters and investors

The austerity measures primarily affect government contracts. The deficit will rise more sharply in 2026 than any forecast anticipated. If the government continues to cut investments, business will shrink for suppliers of construction and infrastructure technology. German companies with public-sector clients in Hungary should review payment terms and contract durations. Investors are monitoring the forint and government bonds. A deficit of 7.5% increases the government’s financing needs. According to forecasts, public debt is expected to rise above 70 trillion forint. The ministry published this figure in its report on the excessive deficit procedure.

Sources: KSH, Government Deficit for the First Half of 2026 (HU/EN); statements by Finance Minister Kármán as reported by Portfolio.hu (HU)

SK, Frankfurt