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Mar 19, 2020 - Zoltán Kovács

Coronavirus impact: PM Orbán announces new economy protection measures

Prime Minister Orbán revealed five new measures aimed at protecting the economy from the negative effects of the coronavirus, addressing the nation in a video posted on his Facebook page on Wednesday afternoon.

“[The coronavirus] does not only put people’s health at risk, although that’s the most important, but also threatens the economy,” said Prime Minister Orbán, beginning his video statement on his Facebook page. The PM revealed five new measures aimed at protecting Hungary’s economy and workers from the negative effects of the coronavirus pandemic.

First of all, the government has imposed a moratorium on all loan repayments for individuals and companies until the end of this year. Secondly, short-term business loans will be extended until June 30, and, thirdly, beginning on Thursday, the interest rate on all new consumer loan interest rates will be capped at the central bank’s base rate plus 5 percent maximum. With the base rate currently at 0.9, that puts the maximum interest rate at 5.9 percent.

The government is also introducing measures to support those sectors of the economy hardest hit by the pandemic, specifically tourism, hospitality, entertainment, culture, sports and transportation. Employers in these sectors will be exempt from paying payroll taxes until June 30. Employees will also see a reduction in their required contributions, including a moratorium on pension contributions. Health insurance premiums will be capped.

Furthermore, taxi drivers (those in the small taxpayer enterprise category) get an exemption on paying fixed-rate taxes until June 30. The new rules forbid the termination of rental contracts and place a moratorium on rental price increases. Tourism development contributions are suspended until June 30.

Finally, the fifth measure introduces new regulations that will make employment laws more flexible.