Finance minister: Hungary’s economic growth sustainable

“The growth trajectory is also sustainable according to international feedback, meaning the Hungarian economy is expected to increase by around 4 percent both this year and next year”, Minister of Finance Mihály Varga said on Tuesday on InfoRádió.

“The growth of the Hungarian economy, which has been ongoing since 2013, is also being supported by the external environment”, he added.

The Minister called the 2019 budget the “budget of secure growth” in view of the fact that reserves will be fifty percent higher than last year, exceeding 300 billion forints (EUR 920 million). “This enables economic intervention, the launching of programmes or the provision of support to enterprises if required”, he added.

The budget was planned with a forint exchange rate that was better than the current one, but according to Mr. Varga the weakening of the forint is not endangering the population or the budget balance, inflation remains under 3 percent and the price of oil is also not critical, meaning no government intervention is expected. He stressed, however, that the Central Bank is monitoring developments and can count on the government’s assistance if required.

Highlighting the target of full employment and the expansion of family support, the Minister said helping public work employees enter the job market, increasing tax allowances for families with two children, and the provision of additional funding for healthcare and education were all important measures included in next year’s budget, adding that the inclusion of the latter two are also justified in view of the fact that the economy can only grow parallel to improving state services.

“The Government did not choose austerity methods as a method of reducing sovereign debt, but following the example of South Korea and Taiwan it trusted in the fact that the Hungarian economic is capable of growing enough to solve this issue”, he said.

He also said that the Government is not currently planning any further reduction in the rate of personal income tax, but is not excluding the possibility of introducing a single digit income tax in future.