Hungary Eyes Defense Budget Hike for 2025 if Ukraine Conflict Lingers, PM Orban Confirms
Hungary’s Prime Minister Viktor Orban emphasized the necessity of further boosting defense spending next year if the conflict in neighboring Ukraine extends into 2025. Speaking on public radio, Orban highlighted the potential impact on overall expenditure, signaling a possible shift in budget allocations.
The 2022 invasion of Ukraine by Russia has spurred increased defense spending among NATO members, particularly on the alliance’s eastern flank led by Poland. Poland, for instance, has doubled its defense expenditure to 3.9% of economic output by 2023 from 2014 levels, according to NATO data.
The country has significantly escalated its defense spending despite Hungary’s opposition to Western military and financial aid to Ukraine, citing concerns about potential spillover effects into Europe. In 2021, Hungary allocated 2.43% of its GDP to defense, surpassing the NATO guideline of 2%.
Orban stressed that if the conflict persists into 2025, the current defense spending levels from 2023-2024 would prove insufficient, necessitating further increases. However, he acknowledged that such adjustments would likely entail reductions in funding for other governmental purposes.
Since assuming office in 2010, Orban has faced challenges in managing Hungary’s budget deficit, exacerbated by the COVID-19 pandemic. Over the past four years, the deficit has averaged nearly 7% of GDP, well above the EU average. To address this, the government recently announced plans to defer approximately 1% of GDP worth of investments to meet this year’s revised deficit target of 4.5% of GDP.
While this move signals a step in the right direction, S&P Global Ratings credit analyst Gabriel Forss suggested that further measures will be necessary, likely following the European Parliament and local elections scheduled for June. This implies ongoing fiscal adjustments to stabilize Hungary’s financial position amid evolving geopolitical challenges and economic
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