September CPI slightly more than expected, says economy minister

The September twelve-month CPI, at 3.8 percent, has slightly exceeded expectations, Finance Minister Mihály Varga said on Friday.

Inflation is reappearing, but this has not altered the room for manoeuvre of monetary policy in a significant way, Varga said, addressing an international conference organised by the insurer Groupama in Budapest on Friday.

“An economy can comfortably live with inflation of about 3 percent, this does not pose a problem”, he added.

Economic growth created the chance for Hungary to catch up with or even exceed the average per capita GDP, calculated on purchase power, of the European Union, Varga said.

Economic growth reached an annual 5 percent in the third quarter, which is necessary to execute the ambitious development plans, he said.

The jobless rate dropped to 3.6 percent in Hungary and the new challenge is the labour shortage in some fields,

the minister said. He added, however, that there is a reserve in retraining the unemployed, employing women and the elderly, and helping fostered workers move to the genuine labour market.

Hungary is focusing on taxing consumption and is reducing taxes on income and payroll taxes, he said, noting the 9 percent corporate tax.

The budget deficit has been reduced to below 3 percent of GDP, in line with EU requirements and the government aims for a budget equilibrium, he said.

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Source: MTI