Hungary could benefit from Germany’s EUR 500 bn infrastructure fund, says national economy minister Nagy
Hungary Stands to Benefit from Germany’s 500 Billion Euro Infrastructure Fund
Last week, Germany announced a 500 billion euro infrastructure fund that could potentially put Hungary in a favorable position, according to the national economy minister. Speaking after a meeting of the Eurogroup, the council of the euro zone’s finance ministers, the minister emphasized the importance of a strong economy and competitiveness for social policy and national development.
The minister highlighted Hungary’s close integration with the German economy, suggesting that the country could experience faster economic growth than Germany in the coming years. This positive outlook has led to the Hungarian government’s forecast of a 3 percent growth rate for this year being deemed increasingly realistic. Furthermore, he expressed optimism about the potential benefits of US-Hungary cooperation.
In terms of the 2026 Hungarian budget, planning has already begun with a focus on tax cuts. The minister also reassured that the budget deficit would not exceed 3.5 percent of GDP by 2026. Despite a shortfall in the first two months of the year, the minister declared that the budget was under control, with the target deficit for the year remaining at 3.7 percent.
Additionally, discussions around NATO spending and EU financial support for Ukraine were mentioned. Hungary currently allocates at least 2 percent of GDP to defense, with potential expectations of an increase to 3 percent by NATO. There are ongoing negotiations regarding the exclusion of certain defense spending from budget rules.
Regarding EU support for Ukraine, the minister highlighted the financial burden that Europe would bear if the US withdrew its funding for Ukraine. He suggested that it would be more beneficial for the EU to focus on stabilizing its own economy rather than solely supporting Ukraine financially.
Looking ahead, lawmakers are expected to finalize the government’s 2026 budget bill around June 15, with submission to the Fiscal Council for evaluation scheduled for April 20. The budget is projected to maintain a 3.5 percent-of-GDP fiscal deficit and includes provisions for various social and economic programs such as regulated utilities pricing, pension bonus, tax exemptions for mothers, and VAT rebates for pensioners.
