As a country situated on the eastern and southern frontier of the European Union, Hungary experiences first-hand the challenges posed by migration. We also know that we need to prepare for the next difficult, economic period.
“One of the EU’s largest economies, the UK, will soon leave,” Minister Mihály Varga said. “The slowing of the economies of western Europe, particularly the German economy, is a problem because the Hungarian economy depends on them.” For example, he said, three quarters of Hungarian exports and imports go to or come from Germany.
“Over the long term, the slowing of the western European economy will lead to Central Europe’s slowing as well,” the minister said.
As we see these economies slow, the main task of the Hungarian government in 2020 is to protect the Hungarian economy, Hungarian jobs, and Hungarian companies.
Hungarian economic growth has been helped by tax cuts. One of the most important taxes on labor, social contributions, fell by a third from 27 percent to 17.5 percent between 2016 and 2019, creating a HUF 2.6 trillion surplus for Hungarian companies to finance wage increases, without losing their competitiveness. In 2020, the small business tax will be reduced from 13 to 12 percent.
And Hungary will continue to receive EU funding. We have debates with the European Commission – as do many other member states – but this will not change the status of structural funds.
At the same time, Prime Minister Orbán is focused on keeping Hungarian growth higher than the EU average via domestic policy, saying that the government’s aim is “to take Hungarian measures capable of delivering high standards despite the turmoil and slowdown in Europe. This means that Hungarian economic growth should be 2 percent higher than the EU average.”
Photo: kormany.hu