The Minister for National Economy is not satisfied with a weak forint, as the budget was planned with an exchange rate below the 300 EUR/HUF level, and he believes that forint will appreciate, Mihály Varga said on “Mokka”, the morning show of public broadcaster TV2.

The Minister said he hopes that the Monetary Council of the National Bank of Hungary will at its following session mindfully assess which exchange rate is tolerable for the budget, good for exports and acceptable for foreign currency debt holders.

He added that forint depreciation has been the consequence– in addition to the slowing down of the Fed’s “money printers” -- of the fact that due to the low base rate government securities are less attractive for sovereign debt investors.

The Minister for National Economy stressed that the budget was planned with a substantial contingency fund of HUF 220bn, therefore in case the euro-forint exchange rate gets higher than formerly expected there are reserves to draw from.  On the other hand, he said he hoped that in the coming months exchange rates will be corrected, especially as Hungarian economic fundamentals do no justify a weak forint.

In the opinion of the Minister, the Government has been on the right track as far as the creation of jobs is concerned, as over the past year the number of those in employment increased by 107 thousand. However, he added, Hungary has a long way to go: while 5.1 million people have a job in the Czech Republic, a country with a population similar to Hungary’s in size, in our country this figure is only 4 million.

This also implies that in the coming four years, provided the current government is voted into power again, they want to create more jobs in addition to the more than 200 thousand established over the past four years. The Minister emphasised, that as from among the 28 EU member states Hungary’s was the fourth largest GDP increase in the last quarter of the previous year and the country is the best in this regard in the Visegrád Four this objective appears to be attainable. Under current circumstances, he added, economic growth of 4 percent for 2016 is quite realistic. He also pointed out that the Government has managed to place the economy on a growth path while, simultaneously, the level of debt has been reduced and the number of jobs has been increased.

The Minister also mentioned that the Parliament still has to approve the Hungarian-Russian financial contract related to the extension of the Paks power plant.

(Ministry for National Economy)