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Facts & Statistics

GDP to rise by more than 5 percent next year

The Ministry of Finance reported on next year's funding.

According to the plan presented by the Ministry of Finance and the Public Debt Management Center, the budget for 2022 requires HUF 3.2 trillion, financed by net debt issuance of HUF 2.7 trillion and a HUF 489 billion reduction in liquidity reserves in 2021.

Out of the net issuance, HUF 1 trillion of forint bonds and HUF 1 trillion of retail government bonds will cover the net financing needs, while HUF 406 billion of net foreign currency financing and a HUF 258 billion increase in discount rate notes will contribute to the financing of the central budget deficit.

Finance Minister Varga stressed that the aim is to increase the maturity of debt and improve its structure, and therefore successful programs such as the Green Bond Framework Program and the sale of government bonds to households, as well as the exchange auctions, will be renewed.

The financing situation of the budget remains stable, providing the necessary funds for the government’s measures, such as the family PIT repayment, the social security exemption for under-25s, the payment of the 13th month pension, wage increases, and the HUF 750 billion reduction in labor taxes.

Varga stressed that the previous targets remain unchanged, and the priority remains to reduce the debt level and to achieve the lowest possible budget deficit. 

Hungary can continue to be one of the fastest-growing economies in the EU, Varga said, adding that the deficit will not be out of line with other EU member states, as all countries have implemented a significant stimulus in 2020–2021.

This year, the stock of retail government bonds has increased by more than HUF 1 trillion to just under HUF 10 trillion, and the target of HUF 11 trillion will be reached earlier than the previously set 2023, he said. The Green Bond Framework Program will also be further expanded next year with the regular debt auction of a new 10-year green forint bond, he added.

Even in times of crisis, Hungary has been able to end the year with investment grade ratings from all three international rating agencies, he underlined.

He pointed out that the financial reserves for this year have been increased by HUF 350 billion by rescheduling certain public investments. This was made possible by the successful relaunch of the economy, Varga noted.

Zoltán Kurali, CEO of the Public Debt Management Center, said that the foreign exchange ratio of public debt is expected to reach 20.4 percent by the end of 2021. 

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