Mihály Varga revealed how fast the Hungarian economy could grow in 2021

Mihály Varga mentioned as an example that from this year young people under the age of 25 will receive a tax exemption, similarly to mothers raising four or more children. He also said that the refund for PIT payments made in 2021 would be of great help to families this year, and that a further significant reduction in the social contribution tax would be easier for employers.

The Minister of Finance recalled that the Hungarian economy was on a very good growth path before the outbreak of the coronavirus epidemic, producing the highest growth in the European Union in 2019. The epidemic interrupted this process, but fortunately the Hungarian economy was able to return to its previous growth trajectory relatively quickly, he said. Last year’s preliminary GDP data will only be released in mid-February.

Mihály Varga underlined that if financial stability strengthens and investor perceptions improve, it will help economic growth in the long run. The measures taken during the coronavirus epidemic will also help Hungarian fiscal policy return to equilibrium as soon as possible, said the head of the ministry.

The Minister of Finance also spoke about debt growth as a share of GDP is projected to decline in 2021, following the increase in debt in 2020, and final figures will be available in February.

the average debt level jumped from 80 percent to over 100 percent, and in the case of Hungary this indicator increased from 65 percent to 80 percent. He stated that the government had a disciplined, tight budget, so he had already decided to increase reserves at the end of last year, and therefore saw an opportunity to reschedule investments this year. the portfolios have already spent so much less, ”he said. The government also saw an opportunity to make investments in the longer term, as Hungary will reach a higher level than the EU investment rate again this year, the head of the ministry said.

, the cabinet does not consider it necessary to cut further expenditures, and the steps taken so far will ease the expenditure side of this year’s budget by HUF 755 billion, which gives a chance that the deficit will be one percentage point lower than the planned 5.9 per cent in 2022.

Mihály Varga said that the fate of the HUF 480 fuel price cap after February 15 depends on the later world market price of oil, which cannot be predicted yet.

The Head of the Ministry confirmed that the development funds for the EU Recovery Program would be available in the budget, if no agreement could be reached with the European Commission (EC), these programs would still be launched.

The government representative is extremely irresponsible n that the ECJ was “considering the release of these subsidies in the case of Poland and Hungary on the basis of apparently politically motivated considerations”.

Hungary has also agreed to loans from the recovery fund’s money should be available, said Mihály Varga, who stated that this money belongs to Hungary.

The Minister emphasized that monetary policy was the key decision-maker for inflation and that the Monetary Council had taken steps since mid-summer to try to moderate and reduce inflationary pressures.

This obviously means a higher level of interest rates, which will lead to higher spending by the state on financing government securities and government debt, added). )

Cover photo: Ákos Stiller / Portfolio