Truly impressive: massive budget surplus reported for July

HUNGARY - In Brief 10 Aug 2026 by Istvan Racz

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Well, this is quite brutal: the Finance Ministry reported a preliminary HUF523bn cash surplus for the central budget for July, bringing the cumulative seven-month deficit down to HUF2858bn or an annualised 5.4% of GDP:Indeed, the central budget had surpluses in each of the three months since Tisza has taken over. The cumulative surplus for the May-July period reached HUF992bn. In January-April, the annualised cumulative deficit was still 13% of GDP, as the old Fidesz government pushed the spending pedal hard before the election. A similar reversal in the intra-year path of the deficit took place in 2002, the previous election year, as well. But that was much less dramatic than the current one, driving the January-July deficit down only to 7.3% of GDP, from 13.4% in January-April, in that year.Big savings were achieved this time from spending by budgetary institutions and by ministries on programs run in their respective policy areas, and from spending on government assets (new investments and the recapitalisation of publicly owned companies, etc.) In other words, the government made big savings out of the discretionary spending on itself. This seems to substantiate Tisza's claim that the Fidesz government's rich spending on itself should be seen as ideal terrain for cutbacks and savings. In addition, tax proceeds grew and debt costs fell.All this is very important, as the poor state of government finances is arguably the weakest point and the biggest policy challenge for Tisza. We have been quite conservative about this area, repeatedly warning about the many difficulties the new government will have to face in their review of this year's budget in September and in put...