Prime Minister Peter Magyar said on Monday that Hungary’s budget deficit for 2026 could top 7% of economic output, even after the government reached a political accord that allows the release of billions of euros in European Union funding.
A deficit above 7% would make Hungary’s gap the largest among EU member states according to the European Commission’s latest economic forecasts, which were issued before Magyar’s statement on Monday.
Magyar said the budget deficit expanded in the first four months of the year, a rise he attributed to pre-election spending that took place under former leader Viktor Orban. Magyar defeated Orban in a landslide election on April 12. He added that the deficit eased modestly in May following the earlier surge.
After taking office, Magyar secured a political agreement with EU institutions to release previously withheld funds. He said the agreement followed his pledges to tackle corruption and to reverse reforms enacted under Orban that had been viewed as harmful to democratic governance. According to Magyar, Hungary’s 2026 deficit would have been above 8% of output had the EU funding not been unlocked.
Magyar also accused Orban of providing the public with inaccurate information about the condition of government finances.
The government has pledged to submit a revised 2026 budget to parliament by the end of August once an audit of public finances is complete. Officials plan to follow the revised budget with a medium-term fiscal plan that will set out Hungary’s approach to meeting the conditions for adopting the euro, targeted at around 2030.
Credit rating agencies are monitoring the new government’s capacity to produce credible fiscal plans and to rein in the expansion of public debt. Hungary currently has the largest debt burden in the EU outside the euro area, a feature rating agencies are watching as fiscal policy is re-evaluated under the new administration.
Context note: The European Commission forecasts referenced were published prior to the statement attributed to the prime minister.