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Economy & Policy

Hungarian economy is resilient to crisis

The Hungarian economy’s growth rate has reached 76 percent of the EU average.

The most important challenges facing the Hungarian economy are the Russian-Ukrainian war, the effects of the epidemic, the disputes over EU funds, illegal migration and demographic problems.

Finance Minister Mihály Varga, speaking at a conference in Budapest on Tuesday entitled “The Stimulating State – Successful Economic Restart 2022,” said that the Hungarian economy had responded well to the difficulties caused by the epidemic, showing one of the fastest recoveries in Europe.

The minister pointed out that the country was able to achieve growth above 7% in 2021 without access to recovery funds, unlike other member states. The growth structure of the Hungarian economy was balanced on the production side, with household consumption having a significant impact on the consumption side.

Varga pointed out that the growth of the Hungarian economy had reached 76 percent of the EU average.

“It is not the euro that creates development,” he said, adding that a well-paced accession to the euro area can have many positive effects, but development does not depend on it.

According to the minister, the investment rate last year was around 27 percent, and these business developments will soon stimulate growth. He also mentioned that the 3.4 percent increase in real wages and the low unemployment rate showed that the Hungarian economy is resilient to crisis.

Varga warned that after a long period of time, attention should again be paid to inflation, which was caused by a combination of economic shutdowns and continued demand. The state, through its regulatory role, has been able to reduce inflation by 3 percentage points via cuts in utility prices and freezing fuel prices, interest rates and food prices, he recalled.

The government has helped Hungarian families by making Hungary the cheapest country in the European Union for electricity and petrol, the minister stressed.

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