1.5 Percent Economic Growth Expected This Year

The government expects the Hungarian economy to grow by 1.5 percent this year, Finance Minister Mihály Varga said during a panel discussion organized by the Lajos Batthyány Foundation and the Batthyány Circle of Young People in Budapest on Thursday.

The public deficit will narrow to 3.9 percent this year from 6.1 percent last year, while inflation will fall to 9.2 percent by the end of the year, the Finance Minister said, adding that at the same time, public debt as a share of GDP is expected to fall from 72.9 percent in 2022 to 69.7 percent in 2023.

In addition to fighting inflation, he said that the government’s main objectives are to keep the Hungarian economy on a growth path, maintain high employment levels, and reduce the risks facing Hungary.

The politician recalled that in 2010, Hungary was ranked among the ten riskiest countries in the world in economic terms and by 2019, it had become the fastest growing economy in the European Union.

The Finance Minister also criticized the European Union for withholding EU funds. He said that Hungary had managed to maintain economic growth in recent times by not yet receiving the funds for the post-pandemic recovery program, unlike other EU countries. In other words, the European Commission is also hindering the improvement of the competitiveness of the Hungarian economy by withholding funds and by seeking to introduce a minimum tax, Mihály Varga stated.

He explained the rise in inflation by the increase in demand following the pandemic, the surge in energy prices following the outbreak of the Russian-Ukrainian war, and EU sanctions. He added that at the same time, energy prices are already falling this year and export markets are starting to recover, so the rate of monetary depreciation is expected to fall to single digits by the end of the year.

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