In a recent interview, budget expert Balázs Romhányi criticized the Hungarian government’s fiscal policies, equating them to "fiscal alcoholism" and suggesting that substantial reforms are needed for economic recovery.

Romhányi emphasized that a change in government could provide an opportunity for public finance reform, detailing the urgent need to revise the tax system, family support measures, and utility management.

The government has submitted its budget plan for 2026, leading to questions about the timing as uncertainty surrounds the current year's financial outlook.

Traditionally, Hungary’s budget has been presented in the fall, informed by the prior year’s data, allowing a clearer picture for policymakers.

However, delays have made past budgets problematic, often requiring revisions post-approval.

Romhányi noted that this pattern is likely to continue with the latest budget submission.

He described the budget process as increasingly devoid of transparency, with the ruling party exercising disproportionate control over fiscal matters, reminiscent of pre-transition Hungary’s governance structure.

He suggested that critical budgetary decisions are often made behind closed doors by a small group, which adds to the opaque nature of fiscal planning and execution.

Rományi highlighted systemic issues in budget planning, noting that budgets are often over-ambitious, providing only superficial compliance with "flexibly interpreted" EU rules.

He suggested that while the government may start with sincere intentions regarding deficit goals, lacking institutional mechanisms lead to lobbying influences that derail budgetary intentions.

Short-term political needs often overshadow long-term fiscal responsibility, driving a cycle of increasing deficits.

Looking ahead, Romhányi pointed out that if fiscal matters are not addressed at the start of the political cycle, other reforms may be jeopardized.

The ability of any prospective new government to exercise self-restraint will be crucial to the enactment of sustainable economic policies.

He criticized the current administration's approach, equating it to street fighting versus effective governance that requires calculated, strategic planning.

Among the pressing fiscal questions is the government’s commitment to tax exemptions for families with two to four children.

Romhányi argued that a comprehensive review process is necessary to evaluate the efficacy of spending in achieving stated policy goals, particularly in light of previous ineffective family support measures.

He also mentioned the potential for a spending review to assess the effectiveness of utility cost reductions, which have been broadly applied without targeting those most in need, resulting in inefficient resource use.

Romhányi suggested reviewing Hungary’s current flat income tax system, advocating for a progressive tax structure and the imposition of wealth taxes at a European level, citing the challenges of unilateral implementation.

The commentary comes amidst criticisms of Hungary’s performance in public finance management and the prospect of future budgetary stability contingent on political will and reform capability.

As the political landscape evolves, the discussion around Hungary’s fiscal management remains critical.