In his opening address at a conference held traditionally to mark the launch of the new business year, HCCI President László Parragh underlined the importance of stablity and continuity in business policies. The president praised the government for its impressive results....To continue click on title line. (Photo: MTI - from left to right: Economy Minister M. Varga, PM V. Orbán, MNB Chairman Gy. Matolcsy, HCCI President L. Parragh)
He said by now the Hungarian economy reached the level of the pre-crisis German economy. Mr. Parragh acknowledged the government's budgetary disciplines. The President said the Chamber would give its full support to the joint effort of the government and the business community aiming to double real wages in the next ten years. He warned, however, that this goal cannot be achieved unless productivity and international competitiveness improve.
In his speech, Minister for National Economy Mihály Varga said that Hungaryʼs government plans to reduce the cash flow-based general government deficit to zero by 2020, while achieving economic growth over the European Union average in 2018-2022.
The government aims to reduce Hungaryʼs state debt as a percentage of GDP to under 60% by 2022. It also wants to make payroll taxes the lowest in the region by that date, Varga added.
Fulfilling its promise to create 1 million jobs by 2020, compared to 2010, the government aims to add a further 250,000-300,000 workplaces to the economy, the minister said. Another aim is to raise the number of apprenticeship contracts with students in vocational training from 53,000 to over 75,000 by 2022, he added.
Speaking at the same event, György Matolcsy, governor of the National Bank of Hungary (MNB), said that lower interest rates and yields in the wake of the MNBʼs monetary policy easing are expected to save the budget some HUF 750 bln this year.
Hungary needs to maintain its knowledge-intensive growth, but it must also boost capital-intensive growth, Matolcsy added.
Hungary will not have an election budget this year as the government plans to keep the 2018 deficit at the 2.4 percent of GDP target set out in the law, Prime Minister Viktor Orban confirmed to conference participants. The Prime Minister also said that if Hungary succeeds in defending itself then there is a realistic chance of it achieving 4 per cent economic growth every year and full employment by 2022.
Orbán said future economic goals include to achieve an annual increase in the minimum wage. A four per cent economic growth would enable a pension increase and pension premium every year; women would have the opportunity to retire after forty years of employment; and tax allowances for families may continue to increase. He added that every year from 2018 to 2022 the tax burdens on employers would be reduced, the goal being for contributions payable by employers to be the lowest in the region. The Prime Minister also spoke about the need to launch the “Modern Village Programme” this year.
In addition, Mr. Orbán also spoke about several Central European infrastructure investment projects, including the Budapest-Belgrade railway line, and the Budapest-Warsaw and Budapest-Cluj/ Kolozsvár high-speed railway lines. He also said that the Government’s goals for the next term include the extension of the existing motorway to connect Košice/Kassa and Miskolc, and to link Pécs with the Croatian border. Further details of the Prime Minister's speech.
Government plans to reduce Hungaryʼs deficit to zero in two years
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