Hungary Plans Public Debt To GDP Ratio Below 60%

  • 7 May 2018 8:45 AM
  • Hungary Matters
Hungary Plans Public Debt To GDP Ratio Below 60%
Economy Minister Mihály Varga has pinpointed a public debt of 60% of gross domestic product as a goal for 2022.

Varga also told MTI that Hungary’s convergence programme for the 2018-2022 period sent to the European Commission includes a growth projection similar to its economic expansion assumption contained in Hungary’s last convergence programme.

He said growth well above the EU average means Hungary will be able to catch up with the rest of the bloc faster. By maintaining a high growth rate while pursuing a disciplined fiscal policy, the budget deficit and public debt ratios will both decline, he added.

A further goal is for the cash-flow budget to be in balance by the end of the current parliamentary cycle, Varga said. The wage burden is planned to fall to below the regional average by 2022, he said.

Also, as companies and educators become more closely connected, the number of corporate training places will expand, further boosting employment growth, Varga said, adding that the most important task of the government’s economic policy in the coming four years would be boosting the rate of growth.

Improving competitiveness and productivity is key to this goal, requiring support for innovation and infrastructure investments that result in products and services with increased value-added, he said.

Hungary’s GDP growth is set to stay around 4% in the coming years, according to the country’s latest convergence programme posted on the website of the European Commission. Economic growth is planned to be 4.1% in 2019, 4% in 2020, 4.2% in 2021 and 4.1% in 2022.

The projections for 2019-2021 are 0.3- 0.6 percentage points above those in the previous year’s convergence programme.

Household consumption is seen growing by 4.8% in 2019, 4.7% in 2020, 4.6% in 2021 and 4.5% in 2022.

Gross fixed capital formation is set to rise by 7.5% in 2019, 3.8% in 2020, 5.7% in 2021 and 5.1% in 2022.

Inflation is forecast to edge up gradually and peak in 2021 at the National Bank of Hungary’s mediumterm 3% target.

Hungary’s budget deficit as a percentage of GDP is seen narrowing to 1.8% in 2019, 1.5% in 2020, 1.2% in 2021 and 0.5% in 2022.

Public debtGDP ratio is set to decline to 69.6% in 2019, 66.7% in 2020, 63.4% in 2021 and 59.7% in 2022.

The projections for 2019-2021 are 2.2-2.7 percentage points higher than in the previous year’s convergence programme, which the report attributes, to a “significant degree”, to the inclusion of Magyar Eximbank in the general government.

  • How does this content make you feel?

XpatLoop Media Partner

Hungary Matters

Launched in January 2014, this twice-daily newsletter covers 'everything you need to know about what’s going on in Hungary and beyond', according to its publisher the state media agency MTI. Click the title above for more info, and to subscribe.

Explore More Reports

  • International Investment Bank’s Headquarters To Move To Budapest In 2019

    International Investment Bank’s Headquarters To Move To Budapest In 2019

    • 21 Jan 2019 8:48 AM

    The Hungarian headquarters of the International Investment Bank will open in the second half of 2019, and according to plans the entire headquarters will move to Hungary within two to three years, Finance Minister Mihály Varga said after his talks with Nikolay Kosov, Chairman of the financial institution’s Board.

  • Hungarian Finance Minister Announces 8% Minimum Wage Hike For 2019, 2020

    Hungarian Finance Minister Announces 8% Minimum Wage Hike For 2019, 2020

    • 31 Dec 2018 9:39 AM

    The minimum wage in Hungary will increase by 8% on Jan. 1, the finance minister said. The wage will go up by another 8 % a year later, Mihály Varga told a press conference after a two-year agreement was reached at talks in the permanent conference of employer, employee, and government representatives (VKF).

  • Hungary Opposes Separate Euro Zone Budget

    Hungary Opposes Separate Euro Zone Budget

    • 5 Dec 2018 7:34 AM

    Hungary does not support the proposal to create a separate euro zone budget, as such a concept would be against the country’s interests, Finance Minister Mihály Varga was quoted as saying at a meeting of EU finance ministers in Brussels.