Hungary’s Government plans to attract investment to the economy by making its currency more stable rather than by weakening it in an effort to boost exports, Minister of National Economy Mihály Varga told the Wall Street Journal on 2 April.

The Minister stressed the importance of concurrently decreasing foreign currency exposure and enhancing export growth. Emphasising that the National Bank remains responsible for its own policy decisions, Varga said that the Government preferred lower rates, which makes paying back debt cheaper. He added, however, that it falls within the central bank’s competence to find the threshold at which cutting the key interest rate does not induce a significant rise in yields.

Concerning the outlook for this year’s budget deficit, the Minister of National Economy stressed that the Government expects the deficit to be under 3 per cent of GDP, thus complying with EU fiscal requirements and meaning Hungary stands an excellent chance of exiting the Excessive Deficit Procedure. Varga drew attention to budget reserves of 400 billion forints representing 1.3 percent of GDP, saying this may help mitigate any possible budget shortfalls during the year. With regards to growth prospects, the Government forecasts 0,5-1% growth for 2013, he added.

The Government, along with the leadership of the Ministry for National Economy, considers stability, predictability and increasing confidence the cornerstones of its policy and wishes to facilitate the integration of international companies into the Hungarian economy. With this goal in mind, Mihály Varga today signed a strategic partnership agreement with German car and truck parts manufacturing company Continental AG, the 16th consecutive agreement of its kind signed since the summer of 2012. The Government expects to sign a total of about 40 such agreements.

(Ministry for National Economy)