Investment, EU funds drivers of growth, says econ minister

Budapest, June 30 (MTI) – Investment, more efficient use of EU funds and the government’s continued credit schemes could be the drivers of future economic growth in Hungary, Economy Minister Mihaly Varga told the American Chamber business forum in Budapest on Tuesday.

Varga announced that the government and AmCham were actively exploring ways to boost cooperation between the economy ministry and the chamber.

The minister mentioned growing employment, the expansion of export markets, the reduction of administrative burdens and the suppression of black economic activity as factors which could contribute to future growth.

Varga noted that credit rating agencies recently gave Hungary higher ratings and raised the economy’s outlook to “positive” for the first time since 2011. He said the markets never doubted the Hungarian economy but added that it was important to convince rating agencies that the country was on the right track.

“Sceptics say EU funds are the only reason for Hungary’s growth, but if that were so 14-15 other European economies should also be growing, which is not the case,” Varga said.

He said fiscal and monetary responsibility were the foundations for Hungary’s growth, adding that these foundations are stable.

Varga said although investments are growing, more has to be done, as the government has to convince more foreign investors that “it is worth investing in Hungary”.

He said Hungary had to expand its export markets by involving new industries in export activities. Pointing out the automotive industry as an example, he warned that the economy would become vulnerable if Hungary based its entire export strategy on a single industry.

The minister noted that the US was Hungary’s number one trading partner outside of Europe, noting that the 1,750 US companies doing business in Hungary have invested 9 billion dollars in the country. He said the government has signed strategic partnership agreements with ten American companies that employ a combined total of 33,000 people.

Addressing the debt crisis in Greece, Varga said Hungary was not exposed to it, noting that trade with Greece, for instance, makes up about 0.4 percent of Hungary’s foreign trade turnover.

Source: http://mtva.hu/hu/hungary-matters