Economy minister: Competitiveness expected to improve in Hungary

As in recent years every major economic indicator has improved in Hungary, it has become possible to lay down the foundations for the economic policy of coming years, Minister for National Economy Mihály Varga said, at the board meeting of Eurochambres, the Association of European Chambers of Commerce and Industry, held in Budapest.

Among the achievements of recent years the Minister highlighted the positive economic growth trend in place since 2013, the declining government debt-to-GDP ratio, sound public finances, low inflation and rising retail sales.

The fact that Hungary had been placed on a sustainable growth path has also been recognized by all three major credit rating agencies last year, as they restored the country’s investment grade status. As a result, the costs of debt-financing may be reduced by as much as HUF 10bn in the next one, one-and-a-half years.

Speaking of employment the Minister added that the number of people in employment has hit the highest figure in 26 years. The number of people with a job has increased by 700 thousand since 2010, to 4.4 million, while the number of jobless people has halved.

As another favourable development, the pick-up in hiring has been accompanied by rising wages: wages in real terms rose over the past 47 months by 15 percent. Thanks to the wage agreement concluded in November 2016, wages in real terms are expected to gain 40 percent in the next six years in Hungary, and the substantial reduction of payroll taxes in believed to create competitive advantages. These factors are seen to boost economic growth momentum, and result in an annual growth rate of more than the recent 2-3 percent.

Photo: Ministry for National Economy

Source: Press release – Ministry for National Economy