The labor market must improve in order for Hungary to sustain healthy economic growth, a government public finance official has said.
Péter Benő Banai, a finance ministry state secretary, said labor market constraints must be removed in order to ensure sustainable annual economic growth of around 4 percent. Also, productivity should be increased, he added.
The state secretary said that when the Hungarian economy had grown above the EU average in the past, this had often been at the expense of balance in the indicators. A decade ago, even without the economic crisis, there would have been a correction and the government’s aim is to ensure this does not happen in the future, he said.
Benő Banai noted that Hungary’s bad employment rate had improved in recent years. Besides an increase in the prosperity of individuals, the economy itself has reached macroeconomic stability and has expanded, bringing with it a higher tax base and public financial stability, he added.
He added that there are still growth-stimulating reserves in the labor market in the form of the economically inactive and people aged over 55. But productivity at companies needs improvement, with investments in innovation. This would help to address labor market tensions and boost economic growth, he said.