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Government Injects EUR 400 Million to Kickstart Economic Recovery

Hungary Today 2023.09.22.

By mid-September, the National Capital Holding (NTH), managed by the Ministry of Economic Development (GFM), injected HUF 164 billion (EUR 424 million) into the Hungarian economy through the real estate and securities sub-programs of the Baross Gábor Capital Program, the NTH announced in a statement.

This will enable a total of 13 domestic funds of ten fund managers to start their economic stimulus activities through increasing investment activity, stimulating green development and boosting stock market investments, Magyar Nemzet reports.

The HUF 164 billion will help restore economic growth, boost competitiveness, thereby protecting jobs and families.

The disbursement of funds for the real estate and securities sub-programs announced on March 1, as part of the Baross Gábor Capital Program has closed for the winning fund managers. The initial budget of HUF 150 billion (EUR 387.5 million) was increased to HUF 164 billion, with HUF 150 billion allocated to real estate and HUF 14 billion (EUR 36 million) to securities.

Fact

With the Baross Gábor Capital Program, the NTH aims to increase investment activity, improve energy efficiency, achieve green development, ensure its rapid implementation, and promote transparent, efficient, and responsible public asset management through successful market capital fund managers. The real estate sub-program aims to strengthen the construction sector as a strategic industry and to promote green development. The securities sub-program is meant to improve the liquidity of the Hungarian stock market by investing in the Hungarian stock market.

The real estate funds can use the capital to renovate existing properties for energy efficiency; to develop, build, or partially purchase green or renewable energy properties.

In addition, the funds may also be used to purchase or build renewable energy power plants, which could lead to the development of larger renewable energy generation capacity. The sub-program could have a positive impact on a real estate portfolio of up to several hundred thousand square meters. Therefore, in addition to stimulating construction investment that is shrinking due to declining residential demand, it will also contribute to reducing Hungary’s energy exposure abroad and to meeting climate targets.

In the coming period, fund managers participating in the securities sub-program will invest mainly in equities and bonds of mid and large cap companies traded on the Budapest Stock Exchange (BSE), as well as in index-tracking funds, making the Hungarian stock market even more attractive for Hungarian issuers.

Bence Katona, CEO of the NTH, said in a statement that “the sub-program includes the largest real estate fund managers in the market and has the potential to stimulate the economy, covering around 80% of the HUF 3,000 billion (EUR 7.8 billion) Hungarian real estate fund market. They can therefore inject resources into the economy efficiently and through results-oriented and responsible asset management.”

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Via Magyar Nemzet, Featured image: Pixabay


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