PM Orbán announced when Hungary’s economy would start to grow again

While 2023 was the year of breaking down inflation, 2024 will be dedicated to restarting economic growth, Prime Minister Viktor Orbán said in an interview with public broadcaster Kossuth Radio on Friday.

Economic growth thrives amid lower interests on loans, he said. The third and fourth quarters of 2023 will see a “beautiful prologue of that”, but the process is expected to gather real momentum next year, he said. At the same time, keeping jobs and ensuring that every Hungarian can work in Hungary comes before all other considerations, including curbing inflation and economic growth, he said. “We need a work-based society,” he said. Hungary now has 4.8 million jobholders, one million more than in 2010, he said. August could see a sea-change in the real value of wages as raises are expected to reach or even surpass inflation, which is forecast to be at 16 percent, he said.

“We are working tirelessly” to bring down inflation and to raise wages, so that the latter can catch up with growing prices soon after August, he said. The two will “hopefully” be close to each other by December, he said. “We will have a tough autumn,” he said. Orbán said that when Fidesz took over the government in 2010, it embarked in a two-year “damage control period”. The economy was stable by 2012, and wages were growing at a faster clip than inflation every quarter, he said. “We did not see real wages fall for more than a decade,” he added. The first half of 2023 was the first time that trend broke, he said. “That upended family budgets.” The government is now working for the second half of the year to offset the damage of the first half, he said.

Read also:

• Only Eastern autocrats and fallen Western politicians? Orbán met with several former and incumbent leaders
• PM Orbán: Budapest is a “must-visit” city!

At the same time, employees and employers must agree on the degree of wage hikes, and the government can but assist those negotiations, he said. Unwise measures could cause rising unemployment, he said. Price growth so far has been, at least in part, due to skyrocketing energy prices and European Union sanctions on Russia, Orbánsaid. At the same time, “some of the price raises seem unreasonable, especially in multinational companies,” he said. Multinational companies have kept prices much higher than fair profit would have warranted, he said. “That’s why I call them speculants.”

The government will have to show strength to prevent that from happening, he said. Hungary’s competition office will remain a constant presence in trade, and will wield the tools it has to curb inflation, he said. Regarding the utility price cuts, Orbán said that the measure had left 1,078 billion forints (EUR 2.8bn) with Hungarian families between January-July this year. Every Hungarian family is left with 181,000 forints monthly thanks to the cuts to their energy bills, he said. The European Union sees the measure as “too much, they are of the opinion that Hungarian families should pay more and they want to force that on us,” he said.

Hungarian energy prices are among the lowest in the EU, despite the fact that Hungary has no oil and gas fields, he said. EU leaders are facing scrutiny at home “for making their citizens pay more than Hungarians do . so they attack Hungary,” he said.

“I understand their problem, but I can’t take that into consideration: we must protect the Hungarian utility price caps from Brussels,” he said.

Energy security is key to “any sensible discussion on energy and utility prices”, Orbán said. “If there is no energy, the country, the economy and families grind to a halt.”

Energy security comes before any other consideration, and Peter Szijjarto, the minister of foreign affairs and trade, “has so far done an excellent job” of procuring new resources and conducting international negotiations, he said.

Hungary has achieved an exemption from the EU sanctions hitting Russia, and will have to maintain that exemption for years, he said. The Ukrainians “have thrown in the towel”, and gas deliveries have dwindled through the Druzhba pipeline, he said. “And now they’re saying they will stop altogether in 2024.”

The NordStream pipeline was blown up last year, stopping the deliveries of large quantities of Russian gas, he added. Hungary, which continues to import gas, needed to find an alternative route in the south, he said. “Hence the diplomatic offensive” of the last few days, using the opportunity of the World Athletics Championships, he said.