Hungarian government to launch equity finance scheme

The government plans to launch an equity finance scheme to provide funding for companies through equity funds, whether for current assets or to implement investments that have been postponed, Economic Development Minister Márton Nagy said at an award ceremony of the Joint Venture Association (JVSZ) in Budapest on Saturday.

The scheme, to cover green investments as well as capacity expansions, is expected to be submitted to the government in the coming weeks, he added. It will supplement the “credit pillar” of the Baross Gábor Reindustrialisation Programme, rolled out earlier this week.

The minister noted that the subsidised credit programme offers companies forint loans at rates capped at 6.0 percent and euro loans at 3.5 percent. Credit for green investments will be available at rates capped at 5.0 percent for forint loans and 3.0 percent for euro loans.

He augured “positive surprises” for economic players this year, projecting a growth of 1.5 percent with upside risks and inflation expected to fall into single digits by year-end. The foreign trade balance and the position of the central budget should improve and the labour market will remain stable, he added.

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The economic policy measures “will bear fruit”, he said, after maintaining growth, avoiding recession and curbing inflation, the economy could “take off” in 2024. 

Nagy added that although Hungary’s economic growth reached 4.5 percent in 2022, it was a challenging year, and not only because of the rise in inflation and the devaluation of the forint rate. The war, the sanctions and soaring energy prices forced the government to take defensive measures, he said.

Answering a question from MTI, Nagy said “no two crises are the same”, and if the problems experienced last year return, they will no longer have such a shock effect, both companies and governments have adapted to the situation, while negative risks must also be taken into account, he said.

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Source: MTI