Hungarian government unveils new economic initiatives: Blue-collar loans, home renovation subsidies, and family tax credits
The Hungarian government has introduced a series of economic initiatives, including interest-free loans for young blue-collar workers, home renovation subsidies for families in rural areas, and a gradual doubling of the family tax credit, aiming to stimulate growth and reduce economic dependencies. Additionally, major investments in infrastructure and educational facilities underscore the Hungarian government’s focus on regional and economic development.
Blue-collar Hungarian workers between the ages of 17 and 25 will be eligible to borrow up to HUF 4m, interest-free, in the framework of a scheme to launch on 1 January 2025, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Wednesday.
Borrowers must work at least 20 hours a week in Hungary to be eligible for the ten-year free-purpose loans, Gulyás said. Independent business owners and sole proprietors must certify income of at least the average wage for 20 hours a week, he added.
Eszter Vitályos and Gergely Gulyás at a Cabinet Briefing of the Hungarian government on 30 October 2024. Photo: MTI/Koszticsák Szilárd
Borrowers must pledge to work in Hungary for a period of five years, he said.
Repayments on the loans will be suspended for two years after the birth of the borrowers’ first child. After the birth of a second child, repayments will be suspended for a further two years and half of the principal will be forgiven. After the birth of a third child, the principal will be forgiven in full.
Gulyás: Government ‘waiting to see’ whether EPP can refute corruption allegations
The Hungarian government will be interested to see whether the European People’s Party will be able to refute the corruption allegations levelled at it in the press, Gulyás said. “We are interested to see whether the allegations are founded, and if the EPP is actually allowing corruption, not only within its ranks, but also in the European Parliament and with EU funding,” he said.
Hungarian government submits proposal to double family tax credit
The Hungarian government has submitted a proposal to double the tax allowance for families raising children, Gulyás said. The family tax credit is planned to be implemented in two steps, from July 1 next year and January 1, 2026, he said.
Gulyás: 2025 budget is ‘new economic policy budget’
Gulyás called the 2025 budget “the new economic policy budget” at a weekly press briefing on Wednesday.
Speaking during a break at a cabinet meeting, Gulyás noted that the budget contained measures in the recently announced economic policy action plan. Details of the 21 measures are being hammered out and anyone can weigh in on the most important matters in the National Consultation, a country-wide survey the Hungarian government is conducting, he said.
Lawmakers could take the final vote on the budget and the policy measures in the second half of December, he added. The Hungarian government targets economic growth of 3-6pc in 2025 and 2026, he said. The 2025 budget bill assumes 3.4pc GDP growth, according to “conservative estimates”, he added.
Gulyás noted that the BMW and BYD plants will begin production in Debrecen and Szeged, respectively, adding that these investments alone would generate verifiable growth.
He said macroeconomic data for the whole year, including the latest GDP data, showed the need for a new economic policy. He added that the Hungarian government’s policy of economic neutrality would weaken or even cease dependencies that influence Hungary’s economic growth.
He said real wage growth would reach 9-10 percent this year.
Gulyás said the cabinet had decided on the details of a blue-collar credit and a home renovation scheme in rural Hungary.
Blue-collar Hungarian workers between the ages of 17 and 25 will be eligible to borrow up to 4 million forints (EUR 9,900), interest-free, in the framework of the blue-collar credit scheme set to launch on January 1, 2025.
Borrowers must work at least 20 hours a week in Hungary to be eligible for the ten-year free-purpose loans, he said. Independent business owners and sole proprietors must certify income of at least the average wage for 20 hours a week, he added.
Borrowers must pledge to work in Hungary for a period of five years, he said.
Repayments on the loans will be suspended for two years after the birth of the borrowers’ first child. After the birth of a second child, repayments will be suspended for a further two years and half of the principal will be forgiven. After the birth of a third child, the principal will be forgiven in full.
Detailing the home renovation scheme, Gulyás said families with children in settlements with populations under 5,000 may apply for subsidies of at most 3 million forints to cover up to half of the cost of home renovation. They may also apply for another 3 million forints of subsidised mortgage credit.
On another subject, he said the Hungarian government has submitted a proposal to double the tax allowance for families raising children. The family tax credit is planned to be implemented in two steps, from July 1 next year and January 1, 2026, he added.
Meanwhile, Gulyás said he will accompany Prime Minister Viktor Orbán on a visit to Vienna on Thursday.
Eszter Vitályos, the government spokeswoman, said the Hungarian government’s investments with a combined value of around 8 billion forints have been completed over the last two weeks, including the construction and renovation of schools and kindergartens.
The value of transport development and road reconstruction projects came to 740 million forints, while 4.5 billion forints’ worth of municipal development projects have been completed, she said.
Gulyás: Fresh data justify need for new economic policy
Macroeconomic data for the whole year, including the latest GDP data, show the need for a new economic policy, Gulyás said. Gulyás said the Hungarian government’s policy of economic neutrality would weaken or even cease dependencies that influence Hungary’s economic growth. He added that real wage growth would reach 9-10pc this year.
Gulyás said the cabinet had decided on the support and conditions for a home renovation programme in settlements with populations under 5,000. Families with children in those settlements may apply for subsidies of at most HUF 3m to cover up to half of the cost of home renovation. They may also apply for another HUF 3m of subsidised mortgage credit.
Gulyás: Tisza represents EC, EPP position
The Tisza party represents the position of the European Commission and the European People’s Party “in exchange for support from Brussels”, Gulyás said. Responding to a question on the opposition party’s role in the European Union, Gergely Gulyás said that after the European parliamentary debate, there was “no question that Brussels openly wants to interfere in Hungarian domestic politics and that it also has a protege.” Gulyás said the “price” of its support was that whenever Hungarian interests went against that of the EC and EPP, Tisza would likely represent the stance of the latter “and interpret Hungarian interests flexibly”.
Gulyás: Tisza’s position against farmers ‘unacceptable’
Gulyás called it “unacceptable” that the opposition Tisza Party “has taken a position in Brussels contrary to the interests of Hungarian farmers”.
Answering a question at the press briefing, Gulyás said the European Union’s current system of direct agricultural subsidies was in line with Hungary’s interests, and the changes proposed by the European Commission were aimed at ensuring that “funds owed to Hungarian farmers should go to Ukraine instead”. “We’re unhappy that the European People’s Party is working against the interests of Hungarian farmers, but we find it expressly unacceptable if a Hungarian party does so,” the minister said.
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