How the Hungarian government plans to boost the country’s GDP growth rate

Having successfully tackled inflation, the government has now turned its attention to revitalising economic growth. With a clear strategy in place to achieve their 4% target GDP growth rate, the question remains: how will they rebuild consumer confidence?

The strategy for GDP growth

In a recent announcement, Sándor Czomba, the Minister of State for Employment Policy at the Ministry of National Economy reiterated the strategy, which entails rebuilding consumer confidence, progressively reducing caution, maintaining an investment rate exceeding 25% and enhancing labour market participation, as reported by 24.hu. The government aims to boost participation among individuals under 25 and over 55 with the potential labour pool comprising jobseekers and a segment of inactive individuals of working age, totalling approximately 300,000 people. The Secretary of State highlighted that approximately 40,000 individuals possess the necessary skills and readiness for rapid employment. Additionally, there are 50,000 people who require training due to a lack of qualifications or skills hindering their job prospects. The government intends to target training programmes to address this need. Sándor Czomba also stated that around 150,000 jobseekers, who are not in an employable state, necessitate comprehensive assistance and development.

This assistance will encompass training, wage subsidies, assistance in job placement and access to health or social services. Furthermore, aside from these demographics, approximately 60,000 inactive individuals of working age have the potential to be encouraged and motivated to enter the workforce. Among these individuals, it becomes evident that a subset of inactive population desires employment but faces obstacles due to their living circumstances or health status. In such cases, comprehensive government assistance is warranted. The State Secretary emphasised:

We will prioritise support for young people who are neither in education nor employment

The government’s objective

The Hungarian government’s objective is to surpass the current EU average activity rate of 75% among 15-64 year olds in the long run, aiming for an increase from the current 78% to 85%. This endeavour stands as no lesser challenge than the successful creation of 1 million new jobs, previously committed to and delivered by the government. According to Sándor Czomba, prioritising Hungarian jobs and workers is paramount as reflected in the formulation of a stricter Migration Act, with implementing regulations soon to be published. Achieving the heightened activity rate necessitates mobilising the domestic labour market reserve, aiding jobseekers in finding employment and activating the inactive working-age population. To support these efforts the government plans to implement comprehensive action plans including initiatives like the GINOP Plus programme, which will receive over HUF 460 Billion (EUR 1,188,879,363) in funding to further boost activity rates and employment levels.

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