Public Debt Will Shrink, Contrary to European Commission Report

Contrary to the European Commission’s report published on Wednesday, there is no short- or long-term risk to Hungary’s public debt. The government is committed to fiscal discipline, including the reduction of public debt, writes the Ministry for National Economy.

In the statement, the Ministry pointed out that the fundamentals of the Hungarian economy are sound, the currency composition and ownership structure of public debt are sufficiently diversified, and the financing of public operations is secure and stable. This is also reflected in the ratings of credit rating agencies, that continue to unanimously recommend Hungary for investment, the Ministry added.

The Ministry underlined that

the Fundamental Law of Hungary stipulates that only a budget bill can be submitted to the Parliament if its implementation will lead to a reduction in the public debt compared to the previous year,

and the Stability Law provides additional guarantees to sustain the declining debt ratio during budget implementation. These rules are overseen by the Fiscal Council, an institution independent of the government, they said.

In fact, Hungarian public debt has fallen significantly compared to 2010, and has been consistently below the EU average since 2010, and was lower during the years of the Covid and war crises,”

they pointed out.

According to the European Commission’s autumn 2024 analysis, the average EU debt ratio was 82.4 percent at the end of 2024. In this analysis – in November 2024 – the European Commission projected a debt of 74.5 percent of GDP for Hungary at the end of 2024, while the actual figure could be substantially lower. Thus, even in such a short term, the Commission’s forecast could already show a substantial deviation.

The Ministry pointed out that Hungary has a significantly lower debt ratio compared to

Italy (136.6 percent),
France (112.7 percent),
Belgium (103.4 percent),
Spain (102.3 percent),
Finland (82.6 percent).

The Ministry stressed that, continuing the practice of the past, the government expects a decreasing deficit, as well as a decreasing public debt when planning the 2026 budget. Overall, the Ministry for National Economy is of the opinion that the findings of the European Commission’s report on the subject are not supported by the facts, the statement said.

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