Hungarian economy might be back on track by 2022 thanks to action plan

Photo: Mihály Varga Official Facebook page

The action plan to relaunch the economy is at the heart of the 2022 budget and will help people facing hardships due to the coronavirus pandemic back on their feet, Finance Minister Mihály Varga said on Sunday.

Varga told public Kossuth Rádio that Hungary wants to recover its pre-pandemic growth rate as soon as possible. This may happen as early as 2022, he said.

This year the economy is expected to return to the level where it was at the end of 2019, before the pandemic, he said. In 2022, growth of 5.2 percent and a deficit target of 5.9 percent of GDP are targeted, while the debt rate is expected to return to a path of decline, Varga added.

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The minister cited important social policy targets, such as family support, 13th month pensions, and the introduction of a personal income tax holiday for the 25s.

He said that since 2016, the greatest impetus for economic growth resulted from an agreement with employers and employees involving tax cuts and wage increase.

“If we can return to that path, with continual, vigorous wage increases coupled with tax cuts, then the Hungarian economy’s competitiveness can improve and the growth path can be expected to be steadily in the 4-5 percent range,” Varga said.