Food prices increased by 2.2%, while household energy prices went down by 9.0%. Services prices were up 10.0%, while consumer durables fell by 2.0%.

Commenting on the data, National Economy Minister Márton Nagy said in a statement that real wages had been rising again since the September turnaround, thanks to the continuous fall in inflation and the December minimum wage increase, further strengthened by the teachers’ wage increase and general wage dynamics.

In 2024, real wages could grow by more than 5-6%, he added. Having brought down inflation, the government will now focus on “the main task of 2024” of restoring economic growth.

To achieve this, the activity of the labour market must be boosted further, the ratio of investments must be maintained above 25%, and household consumption must be restored by strengthening consumer confidence.

Budget Posts HUF 1,704 Billion Deficit in February

Hungary’s cash flow-based budget, excluding local councils, posted a deficit of 1,704 billion forints (EUR 4.321bn) at the end of February, the finance ministry said on Friday, citing preliminary data.

The central budget had a deficit of 1,760 billion forints and the social security funds were 23.5 billion forints in the red but separate state funds were 79.0 billion forints in the black.

The budget had a 54.4 billion forint surplus in January. The ministry noted that revenue in February was “several hundred billion” forints lower than in an average month because of VAT seasonality.

It said that the fiscal impact of pension payments, including an annual bonus equivalent to a full month’s pension, had reached 1,041 billion forints in February.

In addition to covering extraordinary expenditures, the budget has ensured the resources for protecting pensions and family subsidies as well as maintaining regulated household utilities prices, the ministry said.

“The government’s aim is to gradually reduce the deficit and state debt,” it added. The government targets a deficit of 4.5% of GDP in 2024, 3.7% in 2025 and 2.9% in 2026, the ministry said.

The full-year deficit target in the 2024 Budget Act is 2,514.8 billion forints.

Hungary GDP Flat in Q4, Contracts 0.9% in 2023, KSH Confirms

Hungary’s GDP stagnated in the fourth quarter and contracted 0.9% in the full year, the Central Statistical Office (KSH) confirmed in a second reading of the data.

Adjusted for calendar year effects, GDP grew by an annual 0.5% in Q4, while it dropped by an adjusted 0.7% in the full year.

Quarter on quarter, GDP was flat, adjusted for seasonal and calendar year effects.

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