articleimg-1
Nov 03, 2016

Improving competitiveness is the key to Hungary's success

Hungarian state debt will continue to decline this year and the budget deficit will be below the 2 percent of gross domestic product (GDP) earlier expected. Economic growth is expected to reach 2.5-3 percent in 2016

Improving competitiveness, cutting red tape and taxes and easing the labor shortage will be the key challenges facing Hungary in the upcoming years, Mihály Varga, minister for National Economy has said.

During the annual hearing of Parliament’s budget committee held yesterday, Varga said that while Hungary is competitive in terms of exports and the number of working hours, a Hungarian worker produces half as much as a Dutch worker during the same number of hours. Hungary must also improve its ability to attract capital.

Minister Varga said state debt will continue to decline this year and the budget deficit will be below the 2 percent of gross domestic product (GDP) earlier expected. Economic growth is seen at 2.5-3 percent in 2016, he added.

MTI reports that investors see an improved economic climate and a positive outlook, with Varga citing growth and macroeconomic data submitted to parliament in the Final Accounts bill.

Real wages were up by 7.5 percent in January-August this year, Varga said, adding that another rating agency is expected to return Hungary to investment grade soon.

Varga also said the Hungarian economy was strong enough to cope even without EU funds. “Competitiveness hinges on an entrepreneurial spirit and innovation rather than on injected funds”, he said, but admitted that “some companies have been comfortable on cheap community funding”.