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Jun 22, 2020

Managing the coronavirus crisis has cost Hungary HUF 1,400 billion so far

Mihály Varga said that an operative board in charge of protecting the economy is being set up to streamline regulations that may act as a drag on economic growth.

 

The finance minister has revealed that managing the coronavirus crisis has cost Hungary HUF 1,400 billion (EUR 4.04bn) so far.

During an interview with Magyar Nemzet on Saturday, Mihály Varga said that an operative board in charge of protecting the economy is being set up to streamline regulations that may act as a drag on economic growth.

The minister said Hungarian firms will benefit from the establishment of an operational board in charge of protecting the economy. It will comprise representatives from 8-10 state authorities such as the tax office, the consumer protection office and the state treasury, and is scheduled to hold its first meeting next week.

Minister Varga noted that the government has established a HUF 633 billion fund to cover health-related expenses, and HUF 480 billion of this has been tapped so far. Fully HUF 904 billion of the HUF 923 billion fund for job protection and investment support has been spent so far. None of this includes the costs of temporary tax forgiveness or reductions as well as a moratorium on paying back loans.

What's more, HUF 9,000 billion, or 20 percent of GDP, is being spent on mitigating the health and economic effects of the epidemic. The economy protection fund in next year’s budget is worth HUF 2,500 billion, while 3,000 billion will cover the health insurance and epidemic protection funds, he said.

Minister Varga said work was under way to restructure Hungary’s hospitals, adding that hospitals had built up unsustainable debts, distorting the healthcare supply market. This issue can be addressed with government subsidies for healthcare investments, he added.

The minister also said the economy was likely to contract by around 3 percent this year, while the budget deficit was expected to exceed 3.8 percent. Public debt, meanwhile, may just tip above 70 percent of GDP once more. The primary focus will continue to be jobs and stabilising the economy. A single-digit personal income tax continues to be among the government’s long-term plans, he added.