Presenting a strategy to boost the country’s competitiveness between 2024 and 2030, Nagy said Hungary would not achieve 4% GDP growth this year because of a temporary weakening on its export markets.

The 4% growth rate is achievable from 2025 and can be sustained in the long term, he added.

The competitiveness strategy was drafted based on feedback from close to 1,300 businesses, the minister said. The economy needs “fine-tuning” rather than a “turnaround”, he added.

The government aims to Hungary’s development index “to reach 90% of the EU’s” by 2030, he said. Its employment rate must rise to 85% and the investment rate to 30% of GDP, including a corporate investment rate of 20%.

The economy must be “re-industrialised” and the export of goods needs to climb to 100% of GDP, he added. The government wants Hungary to be among the 20 most competitive countries by 2030, the minister added.

The government will work to “ensure high-quality work force”, incentivise mobility and trainings, raise real wages continuously and consistently, and reduce the wage gap, he said.

Companies’ competitiveness will be further boosted by credit schemes, Nagy said.

Hungary’s competitiveness strategy also prioritises the development of Hungarian suppliers and the support of R+D+I, as well as strengthening Hungarian-owned industrial companies, he added.

Finance Minister: Budget Deficit Reaches HUF1,704 Billion in February

Hungary’s cash flow-based budget deficit reached 1,704 billion forints (EUR 4.3bn) at the end of February, the finance ministry confirmed in a detailed release of data.

The central budget had a deficit of 1,759.5 billion forints at the end of the month and social security funds were 23.5 billion in the red, but separate state funds were 79 billion in the black.

The budget had a 54.4 billion forint surplus in January. The ministry noted that revenue in February was “several hundred billion” forints lower than average because of VAT seasonality.

It said that the fiscal impact of pension payments, including an annual bonus equivalent to a full month’s pension, had reached 1,041 billion forints in February, bringing pension payments for January-February to 1,420.7 billion.

Interest expenditures, which included large payments on retail government securities, came to 855.4 billion forints, the ministry added. In addition to covering extraordinary expenditures, the budget has ensured the resources for protecting pensions and family subsidies as well as maintaining regulated household utilities prices, the ministry said.

“The government’s most important aim is to gradually reduce the deficit and state debt,” it added.

The government targets a deficit of 4.5% of GDP in 2024, 3.7% in 2025 and 2.9% in 2026, the ministry said.

The full-year deficit target in the 2024 Budget Act is 2,514.8 billion forints. Finance Minister Mihály Varga said a week earlier that the government was drafting amendments to the act.

MTI Photo: Zoltán Balogh

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