Finance minister Varga sees GDP growth of 7 pc in 2021

Thanks to the high inoculation rate, the fourth wave of the coronavirus pandemic is expected to be relatively weak in Hungary, allowing for an estimated 7 percent GDP growth this year, Finance Minister Mihály Varga told the Portfolio Economic Forum in Budapest on Tuesday.

The deficit is expected to come to 7.5 percent of GDP, he said.

Monetary and fiscal policy “must work together” to bring inflation back to around 3 percent, Varga said.

The government expects CPI to start falling from the beginning of 2022 and sees the situation “normalising” by the summer of 2022 to make the mid-term 3 percent target achievable by year-end, Varga said.

The CPI target should be achieved gradually so as to avoid a “new wave of recession”, Varga added.

The government is committed to start reducing the public debt, which has risen to 80 percent of GDP due to the economy protection measures in the wake of the coronavirus pandemic, Varga said.