Minister for National Economy Mihály Varga, speaking on public broadcaster M1’s Ma reggel and Kossuth Radio’s 180 perc, said that the Government aims to formulate an industrial and economic development programme that identifies sectors upon which EU and domestic funding can be focused.

In the opinion of the Minister, the country has certain potentials that must not be left unexploited and certain industrial divisions, which have been increasingly driving Hungary’s economic growth, have “grown up”.

Among these, Mihály Varga singled out the vehicle manufacturing sector. As the electronics industry and – due to the favourable geographical location of the country – the logistics industry are closely related to this, the Minister also named these sectors among the leading ones.

Among the traditional domestic high-performers, the Minister also mentioned the medical machinery and appliance manufacturing, sewage treatment and water purifying divisions, food industry and the tourism sector.

Mihály Varga stated that it is increasingly characteristic of large enterprises which have settled in Hungary that they seek Hungarian suppliers. In case they cannot find the right one, they assist partner enterprises to become one and the Hungarian Government can also help in this process. As an example, the Minister mentioned the Hungarian Suzuki factory where the share of Hungarian suppliers is now above 50 percent.

He considers it important for foreign enterprises to become a partner of Hungarian higher education institutions. Higher added value production can only be realized in case the knowledge of engineers, proper skills and unused capacities within the higher education system contribute to this and it will be one of the priorities of strategic partnerships, he added.

Responding to a question on the fiscal deficit, the Minister stressed that the state budget typically accumulates a large shortfall at the beginning of each year which tend to gradually diminish in the second half of the year. Therefore, it is not unusual that in April the budget deficit reached 97 percent of the annual estimate. The Government’s deficit target is unchanged for the entire year at 2.9 percent of GDP, he said. On the other hand, he said it is “very likely” that a so-called advertisement tax will be introduced.

Mihály Varga stated that it is also highly likely that a single-digit flat-rate personal income tax will be introduced in the current term, provided the economy stays on a growth path for the coming years.

As far as forex loans are concerned, he emphasised that as soon as the Supreme Court delivers its verdict the Government is prepared to seek a solution for the phasing-out of foreign currency denominated loans from the Hungarian market. Such a scheme must be laid down, he said, which provides effective relief for foreign currency debtors without disrupting the sound operation of the banking sector.

(Ministry for National Economy)