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PM Advisor Nagy Outlines Govt Economic Policy Focuses to Fight Pandemic Effects

MTI-Hungary Today 2020.10.05.

The government focuses on seven areas to moderate the negative effects of the pandemic and to put the economy quickly on a growth path once it is over, Márton Nagy, an advisor to Prime Minister Viktor Orbán said in an interview with daily Világgazdaság on Monday.

Every economic policy step should be formulated in harmony with the three main goals stated by the prime minister: jumpstarting the economy, protecting families and developing areas of the country outside the capital, Nagy said.

The seven fields are home creation, the demographic turnaround, the extension of the credit repayment moratorium, support of investments, boosting the financing capacity of specialised state financial institutions, the effective use of European Union resources and the continuation of investing abroad.

Hungary could maintain its economic growth of 2 percentage-point over the EU average, he said. This year’s 5-6 percent GDP contraction will meet, in fact, this target which requires, however, over 5 percent growth next year, he added.

Nagy called it not impossible to raise the number of completed homes to 44,000 a year, necessary for renewal of the stock. But on the short run one could only target to bring the number back to the current 20,000 by 2022, he said. With no intervention the number could drop to 10,000 in 2021 and 2022 as a combined result of the pandemic and the phasing out of the preferential VAT rate on new home construction, he said.

“Jobs are now preserved through the financial support of investments, and even new jobs are being created”, this differs from the summer when businesses had received money to keep employees, Nagy said when asked why they do not extend the Kurzarbeit type wage support. The aim is to raise the number of jobholders to 5 million from the current 4.51.

National Bank Sees No Immediate Systemic Risk to Financial System
National Bank Sees No Immediate Systemic Risk to Financial System

Financial stress had increased significantly around March with the onset of the coronavirus pandemic, but the level of stress was below that of the financial crisis in 2008 and by now it has subsided back to pre-March levels, officials of the National Bank of Hungary said at an online press briefing accompanying the publishing of […]Continue reading

The deadline for submitting applications for the government’s wage support programmes was August 31.

Businesses having liquidity problems or unable to finance investments have the various government and central bank supported credit and guarantee programmes available. The other two means to encourage private investment are government grants and tax cuts.

featured image via Lajos Soós/MTI