It has once again become clear that Hungary’s economic performance surpasses international expectations, Finance Minister Mihály Varga said after talks with Pierre Moscovici, outgoing European commissioner for economic and monetary affairs, on Friday.
In its latest analysis, the European Commission acknowledged that the Hungarian economy would continue to grow above the average European Union rate, the finance ministry quoted Varga as saying.
In a quarterly forecast released earlier this week, the EC raised its projection for Hungarian economic growth this year to 4.4 percent from 3.7 percent, Varga noted.
This is yet more recognition of Hungary’s economic policy, he said, adding that the government’s top priority now was to avert the effects of a potential global economic slowdown and to preserve Hungary’s economic accomplishments.
At their meeting, Varga and Moscovici discussed ongoing financial and taxation issues between Hungary and the EU. They were in agreement that a comprehensive global solution was needed in order to ensure the fair taxation of digital multinational companies, the ministry said.
Next year’s budget, which parliament accepted on Friday, facilitates wage and investment growth and reduces taxes and the state deficit, Finance Minister Mihály Varga told state Kossuth radio on Sunday.
The government’s economy protection action plan opens new possibilities for entrepreneurs by reducing tax burdens, Varga said in an interview to Kossuth radio’s Vasárnapi Újsag.
To further boost tourism, the 2020 budget will see a VAT cut on commercial accommodations, from 18 percent to 5 percent, he said.
The aim is to achieve a growing budget surplus, Varga noted. State debt is expected to fall to 67 percent of GDP next year, from 83 percent in 2010, he said.
State deficit is expected around 1 percent of GDP in the same period, he said.
The Hungarian economy’s soaring 5.3 percent growth in the first quarter of 2019 has convinced the European Union, he said: on Wednesday, the body amended its forecast of Hungary’s growth in 2019 to 4.4 percent.
Several sectors will be faring better under the new budget, Varga said. The government has allocated 2,228 billion forints (EUR 683.5m) to family support and will exempt mothers with four or more children from paying personal income tax. The money allocated for home subsidies will reach 300 billion in 2020, double the 2010 amount, he said.
Healthcare funding reach 2,000 billion forints, 184 billion more than in 2019. Education funding will also rise by 60 billion forints to some 2,000 billion forints, Varga said.
In the featured photo: Mihály Varga. Photo by Szilárd Koszticsák/MTI