Finance Minister Mihály Varga said the government is further reducing public debt and the budget deficit, keeping the country on a growth path both this year and next.
Speaking at a conference organized by Erste Group in Budapest on Tuesday, the finance minister said Hungary’s development level has increased to 77.7% of the European Union average from 66.1% in 2010, allowing the country to overtake Portugal, Romania and Slovakia, among others. This gives the government the foundation it needs to manage the crisis caused by sanctions, Minister Varga said. Hungary’s economy grew by 4.6% last year in spite of the war in Ukraine and without the recovery funds, well above the EU average of 3.5%, Varga said. The government assumes a growth rate of around 1.5% for this year, “and next year we can return to the pre-pandemic growth path of around 4%”, he added. Varga said the budget deficit would be reduced to 3.9% of GDP this year, while public debt relative to GDP would be lowered to below 70%, to be followed by further reductions in the following years. Hungary’s credit ratings and successful bond issuances show that investor confidence in the Hungarian economy is unbroken, the minister said, adding that the Hungarian banking sector remained strong and functional even in a deteriorating international environment. Inflation is on a downward path thanks to the measures introduced by the government and the central bank, and will be pushed into the single digits by year-end, he said.