2025 fiscal deficit is much bigger than officially expected... or will it still be in line in the end?

HUNGARY - In Brief 08 Jan 2026 by Istvan Racz
It has just been reported that the central government's cash deficit ended up at HUF5739bn or 6.6% of GDP in full-year 2025, according to preliminary figures. This means no less than HUF1668bn (an annualised 23.1% of GDP) in December alone, which is quite an impressive sum for a single month, even though not at all unprecedented, looking back to past Decembers:Note: As % of GDP; Sources: Economy Ministry, KSH, own estimatesThe Economy Ministry has made an attempt to soften the result by adding that the EU Commission postponed a payment of HUF248bn from December to early January, referring to  momentary low liquidity in the EU Treasury. 'Taking into account all of this, the cash deficit performed in line with plan in 2025', the Ministry said.Well, certainly, if they say so. But it occurs to us that the cash deficit target for the central government was originally HUF4123bn or 4.8%, which was later on revised to HUF4774bn or 5.5%, and then in early November it was raised further to HUF5055bn or 5.8% of GDP. The preliminary actual cash gap was substantially bigger than even the most recently set revised target. Apparently, the government packed all sorts of discretionary spending into the December budget, on a pretty large scale.Now, does this imply that the main fiscal target indicator, the similarly more than one time upwardly revised Eurostat-methodology (accrual-based) general government deficit will exceed the most recently set full-year 2025 level of 5% of GDP? Well, not necessarily. As it happens, the January-September actual for that category was reported just a few days ago at HUF1219bn or an annualised 2% of GDP. For comparison, the central government cash defic...

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