budget

Hungarian health waiting list unbearable, more money coming in

The Hungarian government is spending 13.6 billion forints (EUR 34.6m) on shortening waiting lists in Hungarian health care, the human resources minister said on Tuesday.

Miklós Kásler told a press conference that waiting lists had “grown extremely long” by 2010, when the Fidesz government came to power. With robust government spending, the waiting lists were cut to 26,000-28,000 people by 2019, from 70,000 in 2013, he said.

The coronavirus pandemic has brought a rise in backlogs in health care worldwide, he said.

In Hungary, the treatment of emergency cases, as well as cancer and cardiac illnesses, remained a requirement, he said.

At another press conference, Kásler said the government had spent a total 9.3 billion forints on developments at the South-Pest Centrum Hospital – National Haematology and Infectology Institute in recent years.

Kásler noted

the “unique position” of the Centrum Hospital in the region, adding that its development was “necessary and justified”.

Concerning the actual projects, the minister said the hospital’s maternity ward was now “family-friendly”: a modern diagnostics unit has been added, while the medical technology and energy systems have been upgraded. He added a database of oncology and haematology patients is under development.

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Read also WHO recommends this Hungarian method to predict COVID spread

Hungary GDP growth 7.1 pc in 2021

finance minister varga

Hungarian economic output grew by an annual 7.2 percent in the fourth quarter, bringing full-year growth to 7.1 percent, the Central Statistical Office (KSH) said in a first reading of data on Tuesday.

Adjusted for seasonal and calendar year effects, fourth-quarter GDP rose by 7.1 percent.

Quarter on quarter, the economy expanded by 2.1 percent, driven by market services, KSH said.

KSH noted that Q4 GDP was 4 percent higher than in Q4 2019, before the coronavirus crisis.

Full-year GDP increased by 2.1 percent from 2019.

Commenting on the data, Finance Minister Mihály Varga said last year’s rate of growth was the most rapid in Hungarian economic history.

The government’s policies based on tax cuts and investments in families and companies had been vindicated,

Varga told a press conference. The policy prepared the groundwork for a swift rebound after the pandemic economic crisis, he said.

Hungary’s economic performance is outstanding compared with other European Union countries too, he said.

Growth in 2022 is expected at 5.9 percent,

he added.

As we wrote before, Hungary’s budget deficit reaches EUR 14.2bn for 2021, details HERE.

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Read also Hungary’s budget deficit brutal high, inflation skyrocketing

Hungary’s budget deficit reaches EUR 14.2bn for 2021

Hungary’s cash flow-based budget deficit, excluding local councils, reached 5,101.5 billion forints (EUR 14.2bn) at the end of December, the finance ministry said in a preliminary reading of data released on Tuesday.

“The budget ensured, to the full extent, the resources necessary to restart the economy and the defence against the pandemic,” the ministry said.

“In the interest of restarting the economy, the government continued its economic policy based of tax reductions, job creation and the strengthening of families in 2021.

As a result, the economy may have grown by 6.4 percent, while the number of employed rose to 4.7 million and the jobless rate fell under 4 percent. Additionally, resources used for family subsidies and for the defence of pensioners increased further,” the statement said.

The deficit climbed by 1,170.2 billion forints from the previous month.

The central budget deficit reached 4,662.3 billion forints at the end of December, the social insurance funds were 419.4 billion forints in the red and separate state funds also showed a gap of 19.8 billion.

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Hungary’s central bank lifts inflation forecast for 2021

national bank of Hungary -mnb nbh

The National Bank of Hungary raised its forecast for inflation for this year to 5.1 percent and lowered its projection for economic growth to 6.3-6.5 percent in a preliminary release of the main forecasts from its quarterly Inflation Report.

In its September report, the central bank had put inflation for this year at 4.6-4.7 percent and GDP growth in the 6.5-7.0 percent range.

The NBH raised its inflation forecast for 2022 to 4.7-5.1 percent from its September estimate of 3.4-3.8 percent. It sees CPI falling to 2.5-3.5 percent in 2023 and 2024 compared with the previous estimate of 2.8-3.2 percent.

The central bank also lowered its GDP growth forecast for next year to 4.0-5.0 percent from the September estimate of 5.0-6.0 percent. It put economic growth at 3.5-4.5 percent for 2023 and at 3.0-4.0 percent for 2024. In September, the NBH put the 2023 growth rate between in the 3.0-4.0 percent range.

The bank said the fourth wave of the coronavirus pandemic and the emergence of new virus variants had increased the risks surrounding Hungary’s economic recovery, noting its decision to prepare forecast ranges.

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Read alsoConsumer prices in Hungary: vehicle fuel prices jumped by 30.7 percent – UPDATE

Record high budget deficit data came

trouser-pockets-poor
Hungary’s cash-flow-based budget deficit, excluding local councils, was 3,931.3 billion forints (EUR 10.7bn) at the end of November, the finance ministry said in a preliminary release on Wednesday.
 
The deficit widened by 1,009.1 billion forints from a month earlier.
 
“Government measures to protect families, reduce taxes and offer investment incentives have helped the economic recovery to a large degree and mitigated the negative effects of external factors,”
 
the ministry said. “The Hungarian economy grew by 6.1 percent in the third quarter, and [Hungary] remains at the forefront of the European Union in terms of its investment.
 
 
Budapest Hungary parliament
Read alsoHungarian government: Growth to exceed 5 pc in 2022

Hungarian government: Growth to exceed 5 pc in 2022

Budapest Hungary parliament

Hungary’s economy was one of the fastest to recover from the fallout of the coronavirus pandemic, with its output surpassing the pre-pandemic level in mid-2021, and its growth expected at 6.8 percent this year and above 5 percent in 2022, Finance Minister Mihály Varga told parliament’s economic committee on Monday.

Unlike during the global economic crisis of 2008, Hungary needed no assistance from the International Monetary Fund, Varga said. This achievement was all the more remarkable as the global recession in 2020-2021 came to 3.6 percent as against 1.7 percent in 2008-2009, he added.

Hungary, he said, had successfully managed its debt amid the hardships of the pandemic, extending debt maturity from four to six years while ramping up domestic financing, with a quarter of public debt now in Hungarian hands, up from 3 percent in 2010.

Referring to the September rating decision by Moody’s, Varga said credit rating agencies generally had a positive view of Hungary’s economy.

Also, since 2013 Hungary has made steady headway in international competitiveness rankings, he added.

The government, Varga said, was committed to tax cuts as well as support for families and businesses.

Tax on employment, at 35.5 percent in 2009, will be 13 percent in 2022, he said, adding that tax on small businesses will be reduced by 1 percentage point.

Meanwhile, the investment rate of 27.5 percent is the highest in the EU, he said.

In terms of health-care investment subsidies alone, the government has backed more than 80 projects worth 87 billion forints altogether, the minister added.

Also, the government has multiplied spending on pensioners, and the 13-month pension will be paid in full next year, Varga said.

Wages since 2010 have more than doubled and more wage hikes for teachers, armed-forces and law enforcement personnel are in the pipeline, he said.

Since 2015, spending on border protection has amounted to 590 billion forints (1.6 billion euros), with the EU providing a mere 1 percent of that sum, Varga said.

The minister noted the government’s scheme to cap utility bills, providing protection for families and pensioners, while, he added, fuel prices at the pump have also been capped.

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Read also Hungary’s budget deficit brutal high, inflation skyrocketing

Update

Socialist MP Lászlo Szakács, a member of the committee, said in response that the government had not taken responsibility for its “flawed economic policy”.

“Inflation is sky-high,” he told a news conference streamed on the Democratic Coalition’s Facebook, adding that the forint, meanwhile, was allowed to remain at a level that suited the government’s strategic partners, multinational companies, who benefited from the weak currency.

On the issue of social support, Szakács accused Varga of ignoring the fact that basic child support and the minimum old-age pension had remained static for the past 10-11 years.

Meanwhile, the finance ministry and the central bank were, he insisted, “fighting each other” through the press.

The Socialist politician said no new resources had been put into education or health care, and he complained of a dearth of developments fit to put the country on a path of sustainable development.

Hungary’s economy had seen the price of imports skyrocket, says Finance minister

finance minister varga

Mihály Varga, the finance minister, in an op-ed published on Tuesday, said fiscal policy and wages only had a mild effect on inflation and the current account, and external factors were more at play.

In his article in the business daily Világgazdaság, Varga said the jump in energy prices, raw materials and transport costs, as well as the re-pricing amid the post-pandemic economy — services in particular — was largely behind the 6.5 percent headline inflation.

Fiscal policy, he said, had an impact on inflation through price regulation and the indirect effects on demand in the economy.

Regulated prices have increased by 0.1-0.8 percent each year in the last seven years, the minister said, adding the government recently capped the price of fuel at the pump at 480 forints per liter. Policymaking has, on the whole, moderated inflation, he added.

Neither has budget-related consumer demand stoked inflation, Varga wrote. Like in other EU countries, the budget deficit ticked up due to Covid- and economic recovery-related measures.

Hungary’s economy has rebooted at a fast pace, and up until the summer growth exceeded the pre-epidemic period, he said, adding that investments geared towards protecting and creating jobs helped to produce the third biggest increase in employment in the EU.

Varga said that when it came to wages, there was an important distinction to be drawn between gross wages and the wage costs, with the wage burden on employers falling from 28.5 percent to 13 percent over the past decade. Meanwhile, wages have grown in line with the economy’s performance, so rising wages have not really further fueled inflation, he added.

Varga said

Hungary’s economy had seen the price of imports skyrocket, however.

The poor exchange rate may have contributed to this, he added.

Meanwhile, the current account had turned negative by 2019, paired with strong economic growth backed by robust domestic demand and a high investment rate, he said. The Covid recession had a moderate effect on the external balance: falling imports and less repatriation of capital by foreign-owned companies partially offset tourism and other losses. While the current account deficit widened, the inflow of EU money quickened, and as a result, Hungary’s ability to secure financing abroad remained strong, he said.

The first half of 2021 saw some improvement, though preliminary figures should be treated with caution,

he said. Real data on the income of foreign companies will only be available after tax returns have been processed, typically in September of the year following the year, he said.

Still, the recovery, he added, had various detrimental effects on the financing position in relation to the rest of the world.

So, Hungary may again become a net borrower, he cautioned. The peak in this respect was likely in the fourth quarter of 2021 and the first quarter of 2022, with a current account deficit forecast at 2.8 percent and 2.9 percent of GDP, respectively.

Fuel station
Read alsoHungarian gas stations face difficulties due to lower fuel prices

Hungary central bank raises key rate by 30 basis points

National Bank of Hungary

Hungary rate-setters at a regular policy meeting on Tuesday raised the base rate by 30 basis points to 2.10 percent while also raising both sides of the interest rate corridor by 30 basis points.

The policymakers accelerated the tightening cycle following 15 basis point hikes in the previous two months after October hit 6.5 percent.

Besides the hike to the base rate today,

the Monetary Council raised the O/N deposit rate by 30bp to 1.15 percent and the O/N and one-week collateralised loan rates by 30bp to 3.05 percent.

The O/N deposit rate and the collateralised loan rate mark the bottom and the top, respectively, of the central bank’s “interest rate corridor”.

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Read alsoConsumer prices in Hungary: vehicle fuel prices jumped by 30.7 percent – UPDATE

Orban calls on EC to reimburse Hungary’s border protection costs

orbán fence

Prime Minister Viktor Orbán, in a letter to European Commission President Ursula von der Leyen on Tuesday, repeated his call on the commission to reimburse Hungary’s border protection costs.

In the letter published on his official website, Orbán argued that by now Hungary’s border protection measures had become “exemplary” in Europe.

“A new migration crisis is unfolding at the doorstep of the European Union,”

the prime minister wrote. “As you are well aware, the hybrid uses of migration stemming from Belarus, as well as the disastrous evacuation of the security forces from Afghanistan may potentially bring forth an even more severe crisis than what we have witnessed in 2015.” Orbán said he believed the only reason behind the EU’s current “fragile stability” was “the fact that Hungary, together with other Member States, successfully protects the external borders of our Union”.

Hungary alone has so far spent over 590 billion forints (EUR 1.64bn) from its national budget on border protection, Orbán wrote. He noted that Hungary had been among the first countries to build a physical border fence, “which has demonstrated over the past years that it can safeguard the safety of EU citizens and the European Union as a whole”.

“Over time, the Hungarian border protection measures have become exemplary,”

he wrote, arguing that border fences were now also being built in Greece, Spain, Bulgaria, Slovenia, Estonia, Lithuania, Latvia and Poland.

The prime minister said the recent migration situation had also shown that physical barriers were not only one of the most effective types of border protection tools, but were sometimes also essential to combat hybrid attacks.

“All this justifies the arguments and funding demands that Hungary has long been stating.”

Orbán cited a joint letter signed by the interior ministers of Austria, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Greece, Hungary, Lithuania, Latvia, Poland and Slovakia last month in which they had said that physical barriers appeared to be “an effective border protection measure that serves the interest of whole EU, not just Member States of first arrival”. “This legitimate measure should be additionally and adequately funded from the EU budget as a matter of priority,” he quoted the letter as saying, noting that he himself had underlined this statement at the last European Council meeting.

“It is therefore time for the Commission to do what it should have done years ago and recognise that the protection of the external borders is an indisputable manifestation of European solidarity and that the efforts of Member States in this context deserve recognition and support,” the prime minister wrote.

He said the EC could not ignore the “significant material, human and financial resources” Hungary had invested in the protection of the EU’s internal security over the past six years.

“Therefore, I once again call on the Commission to reimburse the costs of the Hungarian border protection measures the financing of which was refused based on the Commission´s incorrect interpretation and application of the relevant rules,” he added.

In view of the current situation with the Taliban takeover in Afghanistan and the continuous hybrid threats at the borders of Lithuania, Latvia and Poland with Belarus, Hungary sees no indication that migration pressure would ease in the near future, the prime minister wrote, adding that Europe should actually be expecting “yet another significant migration crisis”. Europe must protect its external borders, Orbán said, adding that it had become clear over time that physical barriers were the only effective way to keep Europeans safe from “the mass arrival of illegal migrants”.

Orbán also said that emphasising the need to preserve the unity of the EU in a crisis situation also meant acknowledging “the common responsibility that connects Member States”.

“In our recent conclusions, we called upon the European Commission to propose the necessary changes in the EU legal framework that would also ease the burden of those at our external borders, including Hungary,”

Orbán noted. “These changes should be carried out in addition to financing the past and presently arising costs of physical border barriers.”

Hungary has decided to take full responsibility for stemming illegal migration along the southern section of the EU’s external border, he wrote.

“Now, it is the responsibility of the EU to fairly contribute to our efforts and expenditures,” Orbán said, concluding his letter.

Germany minister Szijjártó
Read also German minister thanks Hungary for border protection

Production starts of first electric car manufactured in Hungary

Car industry

Hungarian car manufacturing has arrived at a new milestone with the mass production of the first fully electric cars manufactured in Hungary, Péter Szijjártó, the minister of foreign affairs and trade, said on Friday.

Speaking at the launching event of the mass production of Mercedes’s electric EQB SUV in Kecskemét, Szijjártó said the 50 billion forint (EUR 1.4bn) investment, supported by a 15 billion government grant, marked the first step in “revolutionary reforms” in Hungarian car-making. The plant will preserve 4,400 new jobs and create hundreds of new ones, he said.

“Countries that win the competition for investments in electromobility win the future,”

the foreign ministry cited Szijjártó as saying.

EQB models will be exported exclusively from Hungary to markets worldwide, excluding China, Mercedes said in a statement. With the launch, the Kecskemet plant will be producing all types of motors, the statement said. Production will become carbon neutral by 2022, making the plant an important pillar of the production network on the long run, Mercedes said.

Brand new electromobility plant inaugurated in Western Hungary

 

Meanwhile,

Hungary’s cash-flow budget deficit, excluding local councils, was 2,292 billion forints (EUR 6.3bn) at the end of September,

the finance ministry confirmed in a detailed reading of data on Friday. The shortfall widened by 391.3 billion forints from a month earlier.

“The outstanding growth of the Hungarian economy in the European Union as well as the

record-high employment data

show that crisis management based on tax cuts, investment incentives and support for families is working,” the ministry said, adding the government would carry on with economic stimulus and ensure all of the necessary resources to do so.

The central budget deficit came to 2,066.7 billion forints at the end of September, while the social security funds were 253.9 billion in the red.

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Read also Hungary’s budget deficit brutal high, inflation skyrocketing

Orbán cabinet: EU approval of Hungarian recovery programme hindered by political considerations

leyen eu

Hungary’s programme for post-pandemic economic recovery meets the criteria laid down previously in all respects but its approval is being hindered by the European Commission’s “politically motivated” considerations, Finance Minister Mihály Varga said after meeting his EU counterparts in Luxembourg on Tuesday.

The European Commission has brought up arguments that have nothing to do with previously established criteria, he said, adding that none of these reservations justify any delay in giving the go-ahead to the Hungarian programme.

The EU has a vested interest in approving national recovery programmes as soon as possible because delays would prevent it from keeping pace with economies that are able to restart more rapidly, Varga said.

Varga called delaying decisions on the recovery programmes all the more “irresponsible” as some of the countries affected had reached their pre-pandemic performance by the second half of 2021.

The Hungarian government has issued bonds to raise 4.5 billion euros so that its crucial economic, environmental, educational and health programmes should not suffer any delay, Varga said.

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Read alsoPM Orbán: Hungary received very little money from Brussels for border protection

Fidesz: Budapest mayor abandoned the capital and neglected his duties

Gergely Karácsony Budapest Mayor

Budapest’s mayor has neglected his duties in the capital in preference for the campaign trail, Zsolt Lang, who heads the Fidesz-KDNP group in the city’s assembly, said in an interview to the daily Magyar Nemzet.

This neglect is evident on the streets of Budapest, with traffic in a state of chaos and public spaces full of rubbish, he told the paper’s Saturday edition.

Lang accused Karácsony of abusing his emergency powers during the period of coronavirus-related restrictions.

A day before the emergency powers expired, the assembly passed a number of important decisions, such as the 7-billion-forint purchase of used trams from Frankfurt that lack air conditioning, he said.

Lang said Karácsony, who is campaigning to become the opposition alliance’s joint prime ministerial candidate ahead of the 2022 general election, was only interested in his own political ambitions. The Fidesz politician said the mayor should instead be dealing with traffic jams and the maintenance of public spaces.

He said Fidesz wanted to engage in professional discussions, but the left wing was too busy with their own political fights. “They’re cynical and arrogant,” he added.

Lang also made reference to “suspicious public procurements” such as a tender for buses and Danube river boats.

He also mentioned the renovation of Chain Bridge which, he said, was of reduced scope compared with the original plans under Karácsony’s Fidesz predecessor yet would cost 5 billion forints (EUR 14.4m) more.

Also, the reconstruction of Blaha Lujza Square is costing 1.1 billion forints more than the original plans and has produced traffic chaos, he said.

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Hungary’s investment volume climbs 10.8 pc in Q2 from low base

Daily News Hungary economy

Investment volume in Hungary rose by an annual 10.8 percent in Q2, albeit from a low pandemic base, the Central Statistical Office (KSH) said on Tuesday.

Investments in machinery jumped by 23.9 percent and construction investments increased by 3.2 percent.

In a quarter-on-quarter comparison, investment volume rose a seasonally-adjusted 3.6 percent.

In absolute terms, Q2 investments reached 2,760 billion forints (EUR 7.9bn).

Construction investments accounted for about 57 percent of the total.

Private sector investments increased by 13.0 percent to 1,580 billion forints, while public sector investments inched up 0.2 percent to 354 billion forints.

Manufacturing sector investments rose by 10.7 percent, construction sector investments jumped by 58.3 percent and investments in the commercial accommodations and catering sector increased by 19.8 percent.

Commenting on the data, Finance Minister Mihály Varga said i

nvestments were at a record high in Q2, with a 10.8 percent growth from the same period a year earlier.

The government’s development-friendly response to the economic fallout of the coronavirus crisis contributed to an uptick in the sector, he said in a Facebook post.

The government allocated 4,000 billion forints to supporting investments last year, and will do the same in 2021, he said.

Hungary’s 27.5 percent investment rate is one of the best in the European Union, he said.

Daily News Hungary economy
Read alsoIs Hungary’s economy relaunching faster than in other EU countries?

Hungarian government spending on higher education at record high

SZIE gödöllő Szent István University agriculture hungary picture

The government is spending more on higher education than ever before, Finance Minister Mihály Varga said at a ceremony at Budapest’s Obuda University marking the start of the academic year.

Spending on higher education has doubled compared with 2014, Varga said, noting that Hungary’s higher education budget has amounted to 1.2 percent of GDP compared with the European Union average of 0.8 percent.

Counting the country’s science parks, the Hungarian higher education sector will receive 960 billion forints (EUR 2.7bn) in funding next year, equivalent to 1.7 percent of GDP, the minister said.

The government will also provide Hungary’s higher education institutions with a combined 2,700 billion forints that they have requested for developments for the coming years, Varga said.

The leaders of a country have a duty to invest in knowledge, as this is in the country’s economic interest, he added.

Hungary’s government expects universities to play a key role in the country’s R+D activities and the area of innovation, and to move up the international rankings, Varga said.

The new operational model that sees universities shifting from being state-run to being operated by foundations serves to boost competitiveness, give them a more flexible operating environment and greater professional independence, he said.

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Stimulus lifts general government deficit to EUR 5.09bn in July

Daily News Hungary economy

Hungary’s cash flow-based general government deficit, excluding local councils, reached 1,803.7 billion forints (EUR 5.09bn) at the end of July, widening on stimulus measures, the Finance Ministry said in a preliminary release of data on Monday.

“Recent measures aimed to support investments, job creation and families have left significant resources in the economy,” the ministry said.

“In order to restart the economy, it is necessary to continue pursuing supportive fiscal policies this year. Further stimulating the growth already under way will also help us achieve 5.5 percent economic growth this year,” it added.

The central budget ran a 1,620.9 billion forint deficit at the end of July, the social insurance funds were 221.9 billion forints in the red, and the separate state funds had a 39.1 billion forint surplus.

In the same period one year earlier, the central budget had a deficit of 2,165.0 billion forints.

The ministry noted that

revenues from corporate tax, VAT, personal income tax and social security contributions were higher in January-July 2021 than in the same period a year earlier.

However, revenues were significantly influenced by the economic impact of the coronavirus pandemic and the related employer benefits, the reduction of the social contribution tax from 17.5 percent to 15.5 percent as well as higher wage outflows, the increase in average earnings, it added.

Among expenditure items, the ministry noted spending on road developments (172.9 billion forints), transport programmes (123.1 billion forints), and support to boost competitiveness (91.8 billion forints) required by the coronavirus crisis.

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Read alsoFitch: record of unorthodox policy moves and worsening governance indicators

Hungary to leave EU at the beginning of next decade?

There is a chance that at the end of the 2020s, Hungary would reconsider its European Union membership. 

Hungary joined the European Union in 2004, hoping to catch up to its Westerns partners in the community. While many years have passed and a significant change in the small Central European state is visible now in all aspects of life, Hungary is still somewhat behind. 

EU Dual Food Quality: Hungary tastes different

After 17 years of membership, the country, for instance, is still using its national currency instead of introducing the euro. 

Hungary to replace forint with euro? 

The common EU currency is not the only example showing the differences among Union members regarding money.

Ever since Hungary joined the community, it has always taken more out of the joint budget than it has paid in.

However, despite the joint efforts to financially help the less fortunate member states and elevate them to the same level, some countries are starting to raise their voices against this and see it as unfair. Especially those who pay in significantly more than what they have been receiving in return. 

Telegraph brings up the example of the EU budget cycle from 2018, when Hungary received over £4 billion, mainly to even out inequalities across the bloc. The same year, the still EU member UK paid almost double of this amount into the pot. 

This unequal and unfair situation, although based on agreed-on factors like the population and the country’s GDP, will soon change.

Hungary is expected to become a net contributor to the budget by 2030.

It means that it will pay into the collective budget rather than taking out. 
Finance Minister Mihály Varga told ATV that

the country might rethink its position by the end of this decade.

Although he would still vote yes if a hypothetical vote were to take place on the membership this year, he also added how his opinion might change drastically in the near future. 

“When we evaluate us being net contributors to the EU, there is a chance for a new perspective on the issue. Especially if the attacks coming from Brussels become permanent because of our choices of values”, said Varga.

Which values was he speaking about? The most recent confrontation between the Hungarian government and the European Union, more precisely the European Commission, is based on the newly introduced “homophobic law”, widely seen as discriminative. Many political leaders around the world and inside the EU have commented on or even protested against it. The Commission itself has been looking for a solution to penalising the Orbán government for not respecting fundamental human rights. It seems like one of the legislative branches of the EU has found a way to do so. 

Has the European Parliament found a way to sanction Hungary for the “homophobic law”?

Hungary once again got into a battle with Brussels and the other member states over the access to Budapest’s cut of the massive pot of cash created for the economic recovery of the member states from the pandemic.

The European Commission is trying to delay the approval of the pay-outs and link it directly to certain conditions, such as cracking down on corruption, respecting the Rule of Law, human rights, and press freedom.

Things that are currently seen as being compromised in Hungary. 

World Press Freedom Day: Hungary is not doing great

“The country doesn’t have time for these games. That’s why we’re going to launch the national plan with our own resources,” Varga said.

Fitch: record of unorthodox policy moves and worsening governance indicators

Hungary government Europe terror

Fitch Ratings affirmed Hungary’s ‘BBB’ sovereign rating with a stable outlook at a scheduled review on Friday.

“The ‘BBB’ ratings reflect the Hungarian economy’s strong structural indicators and record of stable growth fuelled by investment. These are

balanced against high public debt, a record of unorthodox policy moves and a worsening of governance indicators in recent years,”

Fitch said.

“The Stable Outlook reflects Fitch’s expectation of a sustainable economic recovery and a mild fiscal consolidation path that would still allow the public debt ratio to fall, albeit slowly, from 2021,” it added.

Fitch put Hungary’s real GDP growth at 6.5 percent in 2021

and at an average of 4.8 percent in 2022-2023.

 

Official: Hungary’s debt below the European average

forint euro kató alpár fotó

The head of Hungary’s Fiscal Council has praised Hungary’s ability to reduce its public debt, pointing out the debt is below the European average.

Árpád Kovács told public radio on Wednesday that the Visegrád Group (Czech Republic, Hungary, Poland and Slovakia) generally “work with” low public debt.

Hungary managed to reduce it from an earlier high level to around 66 percent by 2019, but then “like everyone else”, it was forced to push it up as a result of the coronavirus pandemic in 2020, he noted.

The debt has somewhat decreased since but is still at a higher level than in neighbouring countries, he added.

The public debt-to-GDP ratio is targeted at 79.9 percent in 2021, down from 80.4 percent in 2020, according to a finance ministry report issued in late June.

Kovács said Hungary had put an emphasis on protecting jobs, so unemployment figures had not become as “tragic” as in the EU. The current level of around 4 percent was far better than the EU average, he added.

Commenting on inflation, he said the central bank was clearly making efforts to hold it back, noting yesterday’s decision to raise the base rate.

forint euro kató alpár fotó
Read alsoOfficial: Hungary’s debt below the European average