In the future Hungarian economic policy will concentrate on investments and igniting economic growth – Minister for National Economy György Matolcsy said in Budapest at an event organized by the American Chamber of Commerce in Hungary (AmCham) on Monday.
The Minister emphasized that growth can be based on a stable fiscal and political situation, highlighting that since the Government took to office in 2010 it has achieved a breakthrough in five fields: the budget has been consolidated, general government debt reduction is under way, the number of jobs has increased (due partly to public employment schemes) and the unemployment rate has declined. The Government has also achieved a current account surplus.
He pointed out transport equipment manufacturing, electronic, “green” and healthcare industries; innovative industrial sectors, the services sector, agriculture and food industry; logistics, bionics, creative economic sectors and tourism, as fields of great potential from the aspect of economic growth in the years to come. National development programs for 2014-2020 will also focus on these fields.
He also said that the Cabinet utilized some non-conventional, new instruments for reducing general government debt and creating new jobs. According to Minister Matolcsy, in the next couple of years these new measures will also be deployed in several EU countries.
He emphasized that political stability could be maintained throughout this consolidation process, and this has been mainly the result of unorthodox measures. On the other hand, the measures have put great burden on certain economic stakeholders, such as the energy and telecom sectors, he admitted.
In his words one of the key problems of Hungarian economy is that the investment rate (FDI) is much lower than in other Central Eastern European countries. This is unacceptable, but after taking a second look at investment structure it can be concluded that manufacturing industry investments have reached pre-crisis levels.
With regard to economic growth, in the opinion of the Minister a trend reversal may take place in the near future, as after completing financial consolidation the Government can focus on igniting growth.
The Minister for National Economy said: Hungary has close relationships with all the three global economic centers – Asia, Europe and North-America. Regarding access to major EU markets, Hungary enjoys a favourable position and the country aims for turning Central Europe into the growth engine of the EU.
Speaking about Hungarian economic policy, Minister Matolcsy said that keeping the state budget deficit below 3 percent of GDP continues to be a key principle. Structural reforms will also help achieve this goal and, in addition, the Government aims for the highest possible employment rate in public work schemes and the private sector. Speaking about the taxation system he said that in line with Government plans certain taxes on consumption will be increased, whereas taxes on income will decrease.
Parallel to declining general government debt, more money can be spent on investments and establishing an investor-friendly business environment. Moreover, the Government expects that after the breakthrough in the second half of this year Hungarian CDSs will continue to decline – the Minister said.
(Prime Minister’s Office)
