Fiscal cost of election campaign spending increases

HUNGARY - In Brief 29 Apr 2025 by Istvan Racz

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The other day, Economy Minister Nagy confirmed that the members of armed services (soldiers, policemen, etc., about 100k people) will be entitled to another one-time bonus payment, equal to 6-month worth of salaries, in February next year, and that the government are going to earmark some HUF450bn of spending for this purpose in the currently prepared budget for 2026. This is very similar to the one-time bonus paid out to the same group in February 2022, which, just as the now announced measure, was clearly a vote-getting exercise in the run-up to the parliamentary election of that year. Mr. Nagy's announcement was not completely new information, but this was the first time that the minister responsible for the budget let the public know what the measure would mean in terms of fiscal implications. Now, we can safely add this to our existing list of the campaign policy measures announced so far for next April's election: By the way, the government are planning to get parliamentary approval for next year's budget by mid-June, returning to this habit after a one-time deviation from it last year, when the annual budget was finalized only late in the year, on the somewhat peculiar explanation that they had to wait for the result of the US presidential election. Independent economists typically claim that setting the budget for next year so early does not make much sense, given that everyone's knowledge of the circumstances for next year is pretty much limited at the current time. But on the other hand, having an approved budget at this early stage should provide analysts with a great deal of extra clarity regarding fiscal policy intentions, even though it is quite for sure ...