“Despite the slowdown of the global economy, Hungary will be able to maintain its current rate of development,” said Finance Minister Mihály Varga at the Inspiring Hungary conference, organized by the Hungarian Investment Promotion Agency and held on October 1st in Budapest.
Germany, Italy, and the UK are experiencing a slowdown, while Japan and the US are facing uncertain prospects. Central Europe, on the other hand, is showing signs of stable, sustainable development, unlike the rest of the EU.
The Hungarian economy has experienced rapid growth, with a 5.2 percent GDP expansion measured during the second quarter of 2019. This figure is four-times as high as the average GDP growth rate of EU Member States. Hungary’s growth can be chalked up to government measures, family tax breaks, job creation and increased wages, and rising household consumption.
Of Hungary’s total GDP growth of 5.1 percent in the first half of 2019, 2.4 percent was the result of internal factors, such as growth in household consumption and investment, whereas 1.6% was due to government measures, including tax cuts, increased wages, protection mechanisms for housing, government initiatives for a more competitive Hungary, and an economic protection action plan. Exports made up only 0.9 percent, and EU resources contributed just 0.2 percent.
The minister noted that Hungary is increasingly an attractive location for foreign investors, and unlike in the crisis of 2008, the country has significant reserves. Both the population and businesses are also less indebted than ten years ago, and the Hungarian banking industry is increasingly resilient. Additionally, real wages have continuously been on the rise in Hungary for the past six years, with a 7 percent increase last year alone. Additional tax measures will be announced soon as well to further support small businesses, housing, and accommodation.
Along with increased reserves and a stable budget, the foreign currency ratio of government debt and share of foreign ownership have decreased significantly. Perhaps most importantly, Finance Minister Varga pointed out that international credit rating agencies have recognized Hungary’s positive performance with a favorable rating as well.