The growth of the Hungarian economy remains one of the fastest in the European Union, and growth is expected to be high in the coming years at around 4-5%. Thanks to a successful restart, Hungarian fiscal policy may return to balance sooner than planned, the Finance Ministry said on Wednesday.
The ministry explained that the government will save 755 billion Swiss francs in next year’s budget by rescheduling some public investments, thus improving the deficit-to-GDP target from 5.9 percent to 4.9 percent. He added that all this would allow a faster reduction in the public debt ratio.
They added that restarting the Hungarian economy has been successful, with the economy’s performance increasing by 6.1 percent, and investments expanding above 12 percent. The number of employed people rose to 4.7 million and the unemployment rate fell to less than 4 percent. They emphasized that all this means that the performance of the Hungarian economy needs to be stimulated to a lesser extent by public investment.
The Prime Minister also mentioned that the government had already decided in early December to make some investments later, increasing its financial reserves by 350 billion Swiss francs this year while reducing public debt. With the current decision, the government will also improve balance indicators in the coming year: savings of HUF 755 billion can be achieved by rescheduling investments whose delays in public procurement, planning or construction will ease the burden of the 2022 budget.
By improving balance indicators, Hungary can be more prepared for global economic risks, Hungary’s financial stability will be strengthened, and investor perceptions will continue to improve.
– Refers to the Ministry of Finance. Finally, the announcement highlights that the government will increase its financial reserves by providing funds for a 13-month pension, family tax deductions, tax breaks for those under the age of 25, a 750 billion HUF cut in labor taxes and a wage increase.
Prime Minister Viktor Orban also made an important financial announcement on Wednesday, which is that the government will announce a moratorium on the retail interest rate.