Hungary projects 3.5 pct deficit, 1.5 pct GDP growth in 2023

The Hungarian government projected that the country's budget deficit would be 3.5 percent of gross domestic product (GDP) in 2023 and that GDP would grow by 1.5 percent, Economic Development Minister Marton Nagy said here on Thursday.

For the current year, the deficit is expected to be 4.9 percent and the GDP growth is projected to be 5 percent, Nagy said at a conference organized by the Oeconomus Economic Research Foundation.

Energy prices were a huge burden on the budget, Nagy said, stressing that Hungary this year expected to pay 17 billion euros (18.2 billion U.S. dollars) for energy compared with 7 billion euros last year.

The minister expects the country's overall energy bill next year to reach 17 billion to 18 billion euros.

According to Nagy, the budget would have zero deficit or could even show a surplus if energy prices had not increased so dramatically. "The budget deficit is now the energy bill itself," he said.

Nagy recalled that Hungary's economy had been stable when the crisis hit but the terms of trade deteriorated due to the increasing energy costs.

Earlier this week, the Hungarian government reached an agreement with the European Union (EU), which enabled the country to access billions of euros in EU funds that were blocked over rule-of-law and corruption concerns. Hungary's annual inflation rate climbed to 22.5 percent in November, the highest since August 1996. (1 euro = 1.07 U.S. dollar)