Mihály Varga: Growth expected to be over 5 percent next year
EnglishThe Hungarian economy was one of the fastest to restart in Europe, surpassing its pre-epidemic level by the middle of the year. Growth is expected to be 6.8 percent this year and over 5 percent next year, Minister of Finance Mihály Varga said at the annual hearing of the Economic Committee on Monday.
He pointed out that the budget was steady and in place during both the crisis and the recovery. Unlike in 2008, there was no need to seek IMF assistance, even though the current crisis was more severe globally than the one more than ten years ago. While the world economy contracted by 1.7 percent in 2008-2009, the rate of recession reached 3.6 percent in 2020-2021, he added.
Mihály Varga said that Hungary had successfully managed its debt in the midst of the difficulties caused by the pandemic, extending the maturity of overdue debts from four to six years and further increasing the role of the population in financing.
Today, a quarter of public debt is in the hands of the population, compared to 3 percent in 2010,
he added.
Referring to the decision of Moody's in September, the Minister of Finance noted that credit rating agencies continue to trust the Hungarian economy.
He pointed out that Hungary has been making steady progress in the competitiveness rankings since 2013, when he took over the ministry.
The finance minister said that they will remain the "government of tax cuts" and families and businesses will continue to receive significant benefits.
He emphasized that the employer’s tax, which was 33.5 percent in 2009, will be 13 percent next year, and the small business tax rate will also be reduced by 1 percentage point.
The Minister of Finance also noted the fact that the Hungarian investment rate of 27.5 percent is the highest in the EU. The government has supported more than 80 investment projects worth 87 billion forints under the health care support program alone.
He recalled that the government had spent more resources than ever before to protect pensioners, and the full 13th-month pension will be paid to all those affected next year.
The minister also mentioned that wages have doubled compared to 2010 or even grown by 150 percent; and this process will be continued by pay hikes for teachers, armed forces officers and law enforcement personnel, among others.
The state budget has provided 590 billion forints for border protection since 2015, with the European Union providing only 1 percent of that sum, Varga said.
