The Hungarian Parliament commenced discussions on Wednesday regarding the general debate of the 2026 budget bill.

National Economy Minister Márton Nagy characterized the proposed budget as a "war budget," in response to ongoing regional conflicts impacting the nation.

In contrast, the previous budget for 2025 was dubbed a "peace budget" following Donald Trump's election as U.S. President, although it did not yield the expected results.

Nagy emphasized that the 2026 budget aims to mitigate the adverse economic effects of the ongoing war in neighboring Ukraine, placing particular focus on supporting families with children, youth, and retirees.

The budget allocates approximately 377 billion HUF for personal income tax exemptions for mothers, 290 billion HUF for increasing family allowances, and 237.5 billion HUF for benefits aimed at individuals under 25 years of age.

Specific figures within the 2026 budget proposal include:
- GDP growth: 4.1 percent
- Inflation: 3.6 percent
- Government deficit as a percentage of GDP: 3.7 percent
- Debt ratio: 72.3 percent (calculated on a nominal GDP of 95,000 billion HUF).

The financially envisioned total expenditure is around 35 trillion HUF, with expected revenues of 34 trillion HUF, leading to a projected deficit of nearly 3.6 trillion HUF, provided the calculations hold true.

Historical trends indicate that previous forecasts have often required substantial revisions throughout the fiscal year.

Analysts suggest that one contributing factor to the inaccurate projections is the government’s tendency to finalize the budget too early, as it typically constructs the next year’s financial plan in the spring, leaving less room for accuracy in forecasts.

The situation has not significantly improved in cases where the budget was prepared later; last year's proposal was submitted in November, but still resulted in inaccurate forecasts.

For instance, by the end of April this year, approximately 70 percent of the entire annual budget deficit had already been realized.

Initially projected GDP growth for the 2025 plan was set at 3.4 percent, but current estimates suggest it might just be between 1 and 2 percent.

This situation poses challenges for the government, particularly as it seeks to implement significant wage increases ahead of elections.

Nagy noted during the parliamentary session that the budget will also account for wage increases, as the minimum wage is set to rise by 13 percent starting January 2026, contingent upon fulfilling certain economic conditions outlined in a prior wage agreement.

László Windisch, President of the State Audit Office (ÁSZ), expressed in parliament that the government’s proposals for 2026 are warranted.

In his remarks, he indicated that despite uncertainties for 2025 and 2026, the audit office conducted its evaluation of the proposal based on the assumption that the government’s aforementioned projections could materialize.

Windisch stated that there is a reasonable chance for the implementation of the government's proposed economic trajectory, asserting that he does not rule out its feasibility.

He did caution, however, that the macroeconomic forecasts for 2026 are predicated on dynamic growth opportunities while acknowledging the existence of substantial negative external factors.

Additionally, Windisch highlighted potential risks concerning the revenue side of the budget, identifying 35.4 billion HUF as uncertain in terms of realization.

The proposed deficit of 3.7 percent is said to be in accordance with current European Union laws, although it may not satisfy Hungarian legal requirements.

The Parliament is expected to vote on the 2026 budget on June 16.