The upgrade will bring about a decline in yields in the near future and Hungary’s vulnerability will continue to decline, though the public debt level is still high compared with the rest of the region, he said.

Varga said, however, that productivity and efficiency in the economy needed improvement in the future.

Hungary is the weakest among the Visegrad Group of countries when it comes to productivity, he noted. Varga also referred to “new challenges” on the labour market, saying that whereas the jobless rate was now well below the European Union average, employers were now complaining of labour supply problems.

Among the ten professional areas where demand for labour is highest, both the very highly qualified and the low-skilled are needed, he said.

Of the 100,000 unfilled jobs in the country, half are in the private sector, Varga noted, adding that labour shortages are geographically spread “very unequally”.

Wage pressure would make life difficult for domestic businesses. “We are further ahead in making productivity gains than in wages,” he said.

Varga said addressing low productivity, ironing out regional discrepancies on the labour market and sorting out the skills shortage will be the main focuses of policymaking moving forward.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Krizsán Csaba