Sándor Czomba, Deputy State Secretary for Employment spoke today at the inauguration of a new factory hall at British American Tobacco’s plant in Pécs. He praised the company’s long-term commitment to Hungary, where this year it is investing nearly 3 billion forints (over 10 million euros) and creating new jobs.
According to Central Statistics Office (KSH) data, in May-July 2012 the unemployment rate has receded to 10.5% from 10.9%. Among the 15-74 age group, the number of people employed rose to over 3.908 million, the highest figure since the onset of the economic crisis in the autumn of 2008.
According to the report issued by the Ministry for National Economy, in the month of July 2012, the central sub sector of the state budget registered a remarkable surplus. With regard to the end-of-July deficits, this year’s figure of 56.7 percent is much more favourable than the 81.8 percent in 2011.
In June 2012 the industrial sector put up a positive performance just as it did in the previous month, the pace of growth however has declined marginally. Unadjusted and working day-adjusted industrial output both increased by 0.6 percent in June compared to the same period of the previous year, which was primarily due to the continued favourable performance of transport equipment manufacturing and the food industry. The seasonally and working day-adjusted monthly index declined by 2.2 percent.
In the second quarter of 2012 Hungary could not detach itself from negative international economic tendencies either. After growth of 1.7 per cent in 2011, which was a high figure even in Europe, in the second quarter of 2012 according to adjusted data GDP declined by 1 per cent. This decline is smaller compared to the previous quarter (unadjusted data signal contraction of 1.2 per cent) – the Hungarian Central Statistical Office (KSH) reported earlier this morning in its release. According to that, about half of the sectors of national economy stagnated. The performance of information and communication sectors increased, whereas that of construction declined significantly.
In July the surplus of the central subsystem in the state budget was 80.2 billion forints. Last year, even ignoring the 500 billion-forint block purchase of MOL shares, the surplus for the same period was only around 40 billion forints, therefore a significant development of the budgetary position can be observed.
In contrast with news spread by newspapers, Mr. Gyula Pleschinger continues in his job as Minister of State for Taxes and Financial Affairs at the Ministry for National Economy.
In May 2012 average gross wages in the private sector increased by 9.4 percent, whereas net wages excluding family tax allowances were 6.5 percent higher in comparison to the same period of the previous year, which signals a wage increase above inflation -- the Hungarian Central Statistical Office (KSH) has reported earlier this morning in its statistical release.
Experiences in the past couple of years have proven that SMEs are unquestionably the growth engines of the European economy and therefore the Hungarian government considers the issue of SMEs a priority. It has been obvious that there cannot be a recovery from the financial and economic crisis without small enterprises which have to be freed of burdens weighing on their activities. The small enterprise tax about to be introduced also serves this end. This tax will set a new direction in the income tax system.
The government has endorsed new regulations on subsidies which can be provided as case-by-case government grants from the vocational training reserves of the National Employment Fund. As a result, the subsidy system aimed at helping meet the labour force demand of enterprises which invest in Hungary will be substantially simpler and more efficient.
In May 2012 according to workday-adjusted statistics the volume of industrial production increased by 1.9 percent in comparison to the same period of the previous year and seasonally and workday-adjusted data also signal a significant expansion of 3.2 percent. Unadjusted figures also show a more favourable result than the statistics of April: in May there was a decline of only 0.4 percent compared to the level of one year ago.
As a result of the Job Protection Action Plan, tax liabilities of employees and small enterprises will decline by 300bn HUF. Taking into consideration that that the proportionate flat rate personal income tax system left 500bn HUF at taxpayers and families, and levies on the profits of small enterprises have been reduced by 150bn HUF, together with the measures announced lately which total 300bn HUF and are aimed at cutting burdens the tax liabilities on employment will be almost 1000bn HUF lower.
The Agreement is aimed at increasing the output of the company in Hungary and fostering supplier co-operation
According to the latest flash report of the Hungarian Central Statistical Office, in January-April 2012 the volume of exports increased by 0.7 percent in comparison to the corresponding period of 2011, while the volume of imports declined slightly by 0.2 percent. Foreign trade balance has still registered a significant surplus of 626bn HUF (2 125 million EUR) for the initial four months of the year.
The Ministry for National Economy and the governing Fidesz-KDNP alliance have agreed on a HUF 300 billion financial relief package as part of the 2013 budget.
The upswing in the number of employed which has been a trend for almost two years remained intact in the period of March-May 2012 as well compared to the same period of the previous year – the latest release of the Hungarian Central Statistical Office (KSH) concludes. The number of employed among the population aged 15-74 years during the past one year has increased by an unprecedented degree, by 63 000, from 3 million 786 thousand one year ago to 3 million 849 thousand. The rate of employment consequently increased to 50.2 percent. The number of employed among the population aged 15-64 years was up by 58 000, from 3 million 753 thousand one year ago to 3 million 811 thousand and the rate of employment thereby increased to 56.7 percent.
Hungary was one of 13 EU countries where in April a decline was registered in retail turnover. On a monthly basis in Hungary sales turnover declined by 1 percent, and the year-on-year decrease was close to the EU average.
According to the bill submitted to parliament earlier today, public sector employees can request the one-off grant provided for them until 30 September 2012.
The Economic and Financial Affairs Council of the European Union (ECOFIN) delivered its decision on 22 June to abolish the temporary suspension of commitments from the Cohesion Fund -- which verdict the Council had been passed on 13 March and which would have entered into effect from 1 January 2013. The decision could be made because the Council and the European Commission also opine that Hungary has carried out sufficient measures in order to cut the excessive deficit.
The proportionate flat rate tax system has delivered the expected results. The family tax allowance introduced together with the proportionate flat rate tax stimulates families to take on more children which impact has also been manifested in the significant increase of the number of births.
Hungary has still no intention to amend the regulation on excise tax and the sectoral extra tax. According to the official position of the government, the Hungarian provisions of law disputed by the Commission comply fully with community law.
In order to combat tax fraud in agriculture, from 1 July 2012 the regulations of reverse charge taxation shall be applied for trade transactions between domestic taxpayers for certain cereals, oilseeds and protein crops (corn, wheat, barley, rye, oat, triticale, sunflower-seed, rape and rape-seed as well as soybean).
In April 2012 gross average wages of the private sector increased by 6.5 percent, whereas net wages excluding family tax allowances were up by 3.5 percent compared to the corresponding period of the previous year – the Hungarian Statistical Office (KSH) reported earlier this morning in its statistical release.
In the past couple of months, in the midst of a protracted financial-economic crisis, the government has carried out structural reforms by which the fiscal balance was made sustainable and general government debt was set on a downward path.
The Governmnet of Hungary considers it a priority to support domestic exports within the framework of its economic policy strategy. In line with this strategy the key objective of the government is -- via providing financing for the export of Hungarian goods and services for enterprises based in Hungary – to enable them to fully exploit their export opportunities that would therefore increase their competitiveness on external markets and to stimulate the Hungarian investments of foreign entrepreneurs.