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Facts & Statistics

Growth will remain above 5 percent next year

The Hungarian economy has rebounded at one of the fastest rates in Europe, surpassing its pre-epidemic level by mid-year, Finance Minister Mihály Varga said.

According to MTI, Finance Minister Varga Mihály told an annual hearing of the economic committee on Monday that growth is expected to be 6.8 percent this year and above 5 percent next year.

The budget has held up 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 at the global level than more than a decade ago. While the global economy contracted by 1.7 percent in 2008–2009, the recession could reach a contraction of 3.6 percent in 2020–2021, he added.

Varga said that Hungary had successfully managed its debt amid the difficulties caused by the epidemic, extending the maturity of debt from four to six years and further increasing the role of the public in financing it. Today, a quarter of public debt is in the hands of the population, compared to 3 percent in 2010, he added.

Referring to Moody’s September decision, the finance minister noted that credit rating agencies remain confident in the Hungarian economy as well.

The minister said that they would keep cutting taxes to benefit families and businesses. He pointed out that the employer’s tax, which was 33.5 percent in 2009, will be 13 percent in 2022 and that the small business tax rate will be cut by 1 percentage point at the same time.  

Varga additionally noted that the Hungarian investment rate of 27.5 percent is the highest in the EU. The government has supported more than 80 investments worth HUF 87 billion under the healthcare sector support program alone. Meanwhile, wages have doubled compared to 2010, with teachers, the armed forces and law enforcement officers also benefiting from pay rises. 

Border protection has received HUF 590 billion since 2015, of which only 1 percent has been financed by the European Union, he said.

The minister commented on the law capping utility bills, saying that it was working, protecting families and pensioners. Fuel prices have also been fixed. The law must be maintained, and Brussels has not found a better solution to the problem of rising energy prices, Varga said.

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