The Hungarian parliament adopted the 2019 budget aimed at guaranteeing Hungary’s security, according to Finance Minister Mihaly Varga.
“The budget is designed to guarantee Hungary’s security, maintain economic growth, support families and pave the way for full employment,” Varga said after the vote where the budget passed with 128 for and 56 against, meaning a majority of 69.6 percent.
Next year’s budget targets an economic growth of 4.1 percent and a budget deficit of 1.8 percent of GDP based on European Union (EU) accounting rules. The public debt is seen dropping to 70.3 percent from 72.9 percent of GDP.
“Growth investment programs amount to 4000 billion forints (about 12.2 billion euros) in 2019,” the minister said. He pointed out that the prospects of the Hungarian economy were good, the foundations for growth were stable, but there were signs of crisis, so the amount of reserves had been increased by one and a half times.
The budget allocates 242 billion forints (about 742 million euros) for the government’s family home purchase subsidy scheme CSOK.
The defense budget will increase by 86 billion forints (about 263 million euros) to 513 billion forints (about 1.57 billion euros), or more than 1.16 percent of GDP. In 2012, the government adopted a resolution in which it pledged to increase annual defense spending by 0.1 percent of GDP from 2016.
The interior ministry will have 35 billion forints (about 107 million euros) less to spend on the handling of mass migration. At the same time, it will get 23.5 billion forints (about 72 million euros) more for counter-terrorism measures.
Varga said the budget retains the 15 percent personal income tax rate under a single-rate personal income tax regime.
Tax cuts are also set to continue, he said. The government sees real wages rising significantly again this year, leaving room for a 2 percentage points reduction in the social contribution tax from 19.5 percent to 17.5 percent, Varga said. These 2 percentage points will mean that more than 130 billion forints (about 399 million euros) will remain with entrepreneurs, he concluded.