Minister of FInance Mihály Varga, speaking at the 25th anniversary of the founding of the Pest County and Érd County Chamber of Commerce and Industry, emphasized that due to the country’s sound economic policies over recent years, Hungarian companies have been able to succeed in the export market due to increased productivity and improved product quality. Two areas of continued focus mentioned by the minister were digital opportunities and linking with value chains.
Varga noted that Hungary is presently Europe’s fastest-growing economy, with the IMF just raising its growth forecast for Hungary this year to 4.9 percent. Most international organizations had predicted last year that the Hungarian economy would slow down, and yet it grew 5 percent in the third quarter. Most importantly, this recent growth, unlike in the mid-2000s, is not due to borrowing or privatization but to factors such as increased consumption, improved productivity and high levels of investment.
The minister also noted that a global slowdown is expected, but Hungary expects to continue growing due to the government’s measures. Varga credited many of the elements of Hungary’s Economic Protection Action Plan announced last June for this expected strength, including various tax cuts, tax allowances and subsidies. Further steps will be taken to ensure growth is maintained at the targeted 2 percent (at least) above the EU average. Varga emphasized that fiscal discipline must be maintained as well.
Future policy, in line with the government’s business-friendly approach, will include further tax and tax administration cuts, investment incentives, support for digitalization and targeted labor market measures.