According to Minister of State Zoltán Cséfalvay, the basis of sound economic expansion has been laid down and it is crucial, because in the long term growth must not be financed from debts.

The Minister of State of the Ministry for National Economy reminded the audience at the Budapest conference organized by business daily Világgazdaság that in the 2000s, growth went hand in hand with increasing debt levels.

He pointed out that as of 2012, debt has been on a downward path, the fiscal deficit went below 3 percent of GDP last year and may be around only 2.7 percent according to EU methodology. He stressed that there will be no “election time budget” in 2014, because the below 3 percent deficit shall be preserved.

Analyzing the consequences of the crisis, the Minister of State highlighted the growing importance of industrial production, which currently contributes 27 percent to total Hungarian GDP. In addition, he also spoke about the importance of changing foreign economic strategy and stated that the policy of “Opening to the East” was established in the spirit of this concept.

The Minister of State added that the development policy for 2013 is assisted by EU funds from which HUF 1500bn is expected to be drawn, and he further emphasized that in 2014-2020, 60 percent of EU resources shall be spent on economic development instead of the 16 percent of the current period.

In the upcoming EU fiscal period of 2014-2020, the EU intends to contribute to common objectives, such as reach a 3 percent level for R&D expenditures, a 75 percent employment rate and 40 percent ratio of people who complete tertiary education. The relevant Hungarian goals are 75 percent for employment and 1.8 percent in R&D spending.

Of the 11 framework projects defined by the EU and available funds, the most important for Hungary may be the GINOP promoting economic development and innovation, the Minister of State said.

(Ministry for National Economy)