2022 is about achieving full potential of restart

"Next year has to be about attaining the full potential of restarting and the Hungarian economy continuing on the same trajectory it was on before the epidemic," the Hungarian finance minister said regarding the 2022 state budget.

ECONOMY POLITICS JUNE 20. 2021 10:02

The most prominent element of next year s budget is the economic restart action plan, which will enable everyone finding themselves in a difficult financial position because of the coronavirus epidemic, to stand back on their feet, the Hungarian finance minister said on the Sunday morning news program on Hungarian public Radio Station MR1.

Mihaly Varga emphasised that he would like to regain the growth capacity characteristic of the years before the epidemic as soon as possible. As he said, 2022 could conceivably be the year, as estimates predict that the Hungarian economy will already achieve the 2019 year-end pre-pandemic levels this year, and economic growth for 2022 is expected to reach 5.2 per cent, amidst a deficit target of 5.9 per cent of GDP, and a debt ratio on the decline.

The finance minister added that measures to achieve key social policy goals have also been set in motion, among which he mentioned the family support schemes, the reinstitution of the so-called “thirteenth-month pension”, and the introduction of tax exemptions for earners under 25 years of age.

“Next year has to be about attaining the full potential of restarting and the Hungarian economy continuing on the same trajectory it was on before the epidemic,” he said.

The Minister Varga recalled the crucial roles of the economic protection fund, in which various available resources were collected together to serve, for example, the launching of investments and the preservation of jobs, and of the anti-epidemic defence fund.

The 2022 budget will retain this broad structure, but we are already talking about an economic restart; a 7.3 trillion-Hungarian-forint (more than 20.5 billion euros) economic restart fund will be set aside in the budget, he explained. He added that there will continue to be a health insurance and anti-epidemic defence fund to the tune of 3.6 trillion forints (more than 10.1 billion euros).

Although, Mihaly Varga explained that he was confident that following 2022 increasingly less emphasis has to be placed on protections against the epidemic.

The finance minister pointed out that the effects of last year s protection measures were already visible in the first quarter of this year, especially in the areas of investments and development. He also said that the result of investments will gradually manifest in the operation of the economy generating a sharp rebound.

He explained that the greatest driving force behind the economic growth in Hungary since 2016 was the agreement to reduce taxes and raise wages concluded with employers and employees.

“If we can get back on this track and there is a gradual yet dynamic wage growth coupled with a decrease in taxes, then the competitive advantage of the Hungarian economy will increase, and our growth trajectory will be in the 4-5 per cent range,” the minister of finance concluded.   

ECONOMY POLITICS

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2022, budget, Hungary