Will PM Orbán’s plan give “big boost” to the Hungarian economy?

Prime Minister Viktor Orbán said there was “little chance” of addressing the decline in competitiveness at the European Union level and the focus should be on the national level in a weekly interview with public radio on Friday. He believes his plan would give a “big boost” to the Hungarian economy.

“Our positions are very far apart, which is why Hungary has to focus on itself, not Europe,” Orbán said on Kossuth Rádió. He added that the response to Hungary’s presentation of its programme for the presidency of the Council of the European Union in the European Parliament during the week had been a “diversion” and the government had weighed matters related to the Hungarian economy for weeks.

The government has drafted a big action plan that will give new impetus to the Hungarian economy, he said. The economic cabinet discussed the plan, which includes measures supporting affordable housing, higher wages and advancing SMES, on Thursday, he added.

He said the plan would give a “big boost” to the Hungarian economy, adding that the housing measures would produce a “housing boom”. He said those measures included dormitory construction and steps to make affordable housing available to young Hungarians, including rental constructions. The government will support home construction in Hungary’s smallest settlements in the framework of the Hungarian Village programme, while eliminating bureaucratic obstacles to using savings for home purchases, he added.

HUF 1m/month wage realistic

He said talks between employers and unions on the minimum wage were “progressing well” and an agreement on the scale of the minimum wage increase was within reach. He said that aiming to boost the average wage in Hungary to HUF 1m a month was “not unrealistic”.

He affirmed government plans to roll out credit for young blue collar workers similar to student loans.

He said assistance for SMES, in the framework of a programme named after the late business magnate Sandor Demjan, would include access to equity financing and preferential credit and aimed to make SMEs more stable and bigger.

Orbán said financing for the measures would have to come from Hungary’s own economic growth, while fiscal deficit and state debt levels continued to decline.

He said September consumption data was “encouraging”, along with real wage growth of close to 10pc, “unmatched in Europe”. He said the debate over sluggish consumption, even amid high real wage growth, was “not healthy”, as it was up to Hungarians to decide what they wanted to do with their money.

He said the real problem was the slowdown in the European automotive industry, which impacted Hungary as an “automotive industry giant” and home to plants of all three premium German car makers.

We will accept from the West and from the East only that which benefits Hungarians

“It doesn’t matter what Europe says, we will stick to our policy of economic neutrality. We will accept from the West and from the East only that which benefits Hungarians, while we will reject that which is against our interests,” he added.