Hungary’s economy was one of the fastest to recover from the fallout of the coronavirus pandemic, with its output surpassing the pre-pandemic level in mid-2021, and its growth expected at 6.8% this year and above 5% in 2022, Finance Minister Mihály Varga told parliament’s economic committee on Monday.
Unlike during the global economic crisis of 2008, Hungary needed no assistance from the International Monetary Fund, Varga said. This achievement was all the more remarkable as the global recession in 2020-2021 came to 3.6% as against 1.7% in 2008-2009, he added. Hungary, he said, had successfully managed its debt amid the hardships of the pandemic, extending debt maturity from four to six years while ramping up domestic financing, with a quarter of public debt now in Hungarian hands, up from 3% in 2010.
Referring to the September rating decision by Moody’s, Varga said credit rating agencies generally had a positive view of Hungary’s economy. Also, since 2013 Hungary has made steady headway in international competitiveness rankings, he added. The government, Varga said, was committed to tax cuts as well as support for families and businesses. Tax on employment, at 35.5% in 2009, will be 13% in 2022, he said, adding that tax on small businesses will be reduced by 1 percentage point.
Meanwhile, the investment rate of 27.5% is the highest in the EU, he said. In terms of health-care investment subsidies alone, the government has backed more than 80 projects worth 87 billion forints altogether, the minister added. Also, the government has multiplied spending on pensioners, and the 13-month pension will be paid in full next year, Varga said. Wages since 2010 have more than doubled and more wage hikes for teachers, armed-forces and law enforcement personnel are in the pipeline, he said. Socialist MP László Szakács, a member of the committee, said in response that the government had not taken responsibility for its “flawed economic policy”. “Inflation is sky-high,” he told a news conference streamed on the Democratic Coalition’s Facebook, adding that the forint, meanwhile, was allowed to remain at a level that suited the government’s strategic partners, multinational companies, who benefited from the weak currency. On the issue of social support, Szakács accused Varga of ignoring the fact that basic child support and the minimum old-age pension had remained static for the past 10-11 years.