Important economic data shared by the Hungarian Finance Minister

The government’s high-priority goal is to maintain Hungary’s economic growth despite the negative effects of the war and sanctions, Finance Minister Mihaly Varga said on Monday.

Varga told a conference of the American Chamber of Commerce (AmCham) and the Hungarian Investment Promotion Agency (HIPA) that the cabinet measures to achieve this aim included capping the price of certain food products and petrol, freezing interest rates until the end of the year and introducing a 350 billion forint (EUR 830m) support scheme for SMEs.

Hungary’s economy expanded by 7.3 percent in the first half of this year, he said. Annual GDP growth is projected to be 4.5 percent in 2022 and even though a slow-down in expected in the first half of 2023, favourable trends are projected from the second half of the year, he added.

To maintain growth, the government lowered the 2022 deficit target to 4.9 percent from 5.9 percent, deferred government investments where possible, ordered economy at public institutions, and announced a number of consolidation measures to keep the budget balanced, Varga said.

As a “great result”, the deficit “barely grew” since May and the central budget posted a surplus in September, an achievement the government is hoping to maintain in October, he said.

Meanwhile, talks with the European Union are in “the last phase”, he said. As a result of “constructive talks”, the parties have set up an “ambitious reconstruction plan” in demographics, green transition, infrastructure and digitalisation, he said. The plans could be partly implemented by mid-November, according to schedule, which would open the way for Hungary to access the EU’s reconstruction and cohesion funds, he said.