Economy & PolicyFacts & Statistics

Double-digit growth expected in Q2 of 2021

Hungary’s economic recovery could have a rapid pace.

From the second quarter, double-digit growth can be expected, resulting in an annual increase of 4 percent in 2021 and an increase of more than 5 percent in 2022, Minister of Finance Mihály Varga said at the 2021 Summit of Business Leaders on Thursday.

The head of the ministry informed company managers that next year’s budget will be presented to the parliament in the beginning of May for the seventh time. 

The 2022 draft takes into account a declining deficit trajectory, and the government will continue to provide resources to help the economic restart, he explained, referring to the possible creation of a new fund that would require an EU contribution.

The government also wants to help the economy return to growth quickly by amending the tax laws, Varga said, pointing out that the aim of the changes this time is not to collect as many taxes as possible but to make quality changes to the system. 

He said that the rules on bankruptcy and liquidation proceedings would be amended, as the protracted nature of these processes would be detrimental to many market players.

The minister said that the crisis caused by the epidemic also set new directions for the government’s economic policy. The lack of healthcare equipment/supplies has highlighted the vulnerability of the global supply chain, which is why Hungary’s self-sufficiency needs to be strengthened in several areas. Through corporate investment support and new healthcare support, more than HUF 450 billion worth of developments were realized or started with a state contribution of HUF 220 billion, he mentioned.

Varga welcomed the fact that the investment rate as a proportion of GDP in Hungary was very high last year, 28 percent, making Hungary the third best in the European Union.

The government provided all the resources needed to protect health while also spending 80 percent of available money on improving the state of the economy, maintaining jobs, increasing export capacity, and supporting new investments, he said. 

Mihály Varga noted that the government budget also covers the costs of defense; meanwhile, public debt in Hungary is below the EU average, the deficit is at the EU level, and major credit rating agencies have confidence in the country.  

The minister of finance also pointed out that the Hungarian credit moratorium, which is unique in Europe, was used by 1.6 million retail and half a million corporate customers; 42 percent of the country’s total loan portfolio was affected by the measure.

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