Zsolt Törőcsik: According to the latest data from the Hungarian Central Statistical Office, last year the economy grew by 0.6 per cent, which was above analysts’ expectations, while the number of people in employment remained at around 4.7 million. Among other things, I’ll be asking Prime Minister Viktor Orbán what conclusions can be drawn from these figures. Good morning.
Good morning.
In the GDP data, we’re now looking at the situation one month ago, at the end of December. What basis does this provide for further economic growth in 2025?
Good morning everyone. Of course now that it’s been officially released the public will be acquainted with the data, but the Government has the advantage of having seen the raw data. So when I said that we were going to have a flying start and a fantastic year, I knew where we stood; so I wasn’t buying a lottery ticket, but I knew the figures and the trends. There can be interesting correlations, which are of course difficult to show in economic terms. I’m convinced that the US presidential election in November is baked into the data. After all, Trump’s victory means that the war phase will surely come to an end and a period of peace will follow. Economic actors are so cautious when there’s a war, that when the opportunity opens up and peace comes, and they can do business, they can invest, they can take risks, and it makes sense to do business, then they’ll move. So I think that last year, and especially this year, this American following wind will also fill the sails of the Hungarian economy. The other element is cynicism. This is a very interesting factor in economics. When a government, or even a private actor, sets a serious economic goal, a significant chunk of public opinion in Hungary – we cannot exactly say whether it’s a majority or a minority – reacts cynically: “Well, it will never work.” I experienced this in 2010, when we committed to creating one million new jobs: smiles, little smiley faces on the internet, eye-rolling, a little mockery, some comparisons with the [Stalinist] Rákosi era – of course the same commie harangues. And then we created one million new jobs. It’s not the Government that runs the economy, but actually the people who run the economy. And one factor that’s very important in Hungarian economic policy is that the people believe that we’re in a situation in which serious things can be done. If this cynicism can be either broken or circumvented, the economy will thrive. Cynicism means talking ourselves out of it; and if we talk ourselves out of it, if we talk ourselves out of setting serious goals, our plans will fail. Now I’m fighting the same battle that I fought for the one million new jobs, but this time it’s called reaching an average monthly salary of one million forints. And I see the same kind of mockery and cynicism going on. But we’re going to do it, and it’s within reach: we’re going to reach an average salary of one million forints per month. An encouraging sign – like a snowdrop or a violet, the first flower of spring – is that, thanks to the pay rises for teachers, we already have four thousand teachers earning over one million forints. So I want to say that there’s a lot of energy in the Hungarian economy. Unlike the cynics, I’d also say that there’s a lot of money in the Hungarian economy. So now we have to pay the interest on government bonds. I think it’s fantastic that 800,000 people have put their money into government bonds, and will now have a pile of money. If I assume that one person represents one family, I can multiply this by four, and it gives 3.2 million Hungarians in families with savings in government bonds. And this is only one tenth of all Hungarian financial savings, which total 90 trillion forints. Be So if we can break through this cynicism… This is why we launched the national consultation, which is always good for breaking through or getting around a wall of cynicism. In the national consultation on the new economic policy, 1.35 million people said, “Go for it, boys!” This is one of the tactics for getting around cynicism. So if we can break through that and in the economy see the movement of money which is owned by people – I’m not talking about businesses, they’re another matter, just individuals – then I can cautiously say that we’ll be able to have a fantastic year. And I look at these government savings, because it’s hard to know exactly what condition families are in financially, I can get that from all sorts of secondary indicators. I’ve looked at who owns government securities – not by name, because I’m not fortunate enough to have that kind of knowledge, but roughly what kind of people they are and what kind of economic situation they’re in. And you’d think that the people with savings in government securities must be the richest. But I found that, for example, around 50,000 people have less than 1 million forints in government securities. The number of people who have between 1 and 5 million forints in government securities is 191,000. They’re not rich. Those with between 5 and 10 million number 117,000. And those who have between 10 and 25 million number 121,000. So, cynicism or no cynicism, I just want to say that I think it’s a realistic objective to broaden and strengthen the middle class, to get the economy moving: to motivate people who already have some savings or who are simply working for a living and want a higher wage, and who will make an extra effort. And to come back to your question of what will happen is that the last quarter – the growth that we saw in the last quarter, which means the end of the recession in Hungary – will be followed by even higher growth in the year ahead. Based on the data, we have a vision for this year. So the economy won’t accelerate at a constant pace: the real, serious pace of growth will be in the third and fourth quarters. In the first and second quarters it will be good, particularly compared to previous years; but it will be in the third and fourth quarters that it truly becomes apparent to everyone that we’ve really entered a new era of growth. And I hope this will continue into 2026.
You’ve talked about cynicism in relation to the analysts. But we see that among the population and among businesses there isn’t cynicism, but there is scepticism. This is because from COVID onwards, it was basically followed by the war, there was high inflation, there were sanctions, and in economic terms the mood among the people was bad. How can this wall be broken down, and how can the 21-point economic policy action plan, for example, help in this?
Of course cynicism only works if it has a basis in reality. So the question isn’t whether or not there are difficulties; there are always difficulties, but the question is what we want to do about the difficulties – whether we say that of course there are difficulties, but we’ll overcome them in such and such a way. This is optimism, or I don’t know what you could call it: hope in action. The other way is the cynic, who says, “Yes, these difficulties are here, and they’ll certainly stay with us, it will never get better.” We’ll never succeed anyway, if we talk ourselves out of it. So we’re undoubtedly in a time of war. There’s a breeding ground for cynicism, there’s a susceptibility to it, because we’ve suffered this, we’ve suffered COVID, we’ve lost lives, the economy has also stopped for a year, for a year and a half, and then this whole period of war arrived. Just because of the sanctions, which of course are Brussels’ fault, we’ve been losing 6.5 billion forints every year since the start of the war. This is 19.5 billion forints over three years. That money should be here in the economy. It’s not without reason that people are cautious. It’s not without reason that they have such a high level of financial savings, for example, and that they have money, but they don’t want to put it into the economy and put it into circulation: it’s because they see the whole world as being unstable because of the war. This is why the US election was important. In world politics the victory of the US president was an outcome that was literally extremely important and useful for the pockets of Hungarians.
You’ve said several times in recent weeks that the aim is to strengthen the middle class. Is the reason the Government is focusing on this partly a philosophical question and partly a practical question?
It’s because it’s a question of what the economy is for. Well, all this mumbo-jumbo – GDP, growth, and all that – is all very fine, it’s very exciting, and one can gain a lot from it. But at the end of the day, what interests me is how life is going for “József Kovács” [“Joe Smith”], an honest man living on the outskirts of Karcag with two or three children. The economy should be about making his life better. And his life – the life of the majority of Hungarians – is a middle-class life. They work, they support their families through work, and they usually own property. This is the category system of being middle class. And they are the most numerous. So if the Hungarian economy is to make sense, the middle class must firstly be stronger, and secondly broader. Broadening it means that those who today are below the level of the middle class should have the opportunity to earn more, to be able to enter a world in which they own their own property and they are self-sufficient. And there are all kinds of psychological consequences: “Through work I support my family, my house, my castle.” Then suddenly the middle class not only deepens, not only gets better for those who belong to it, but it also broadens. So the best remedy for poverty is to broaden the middle class. We don’t have to worry about the rich, because they’ll run their own lives, and we need have nothing to do with that – government economic policy doesn’t need to worry about that. They should be left to make their money grow, pay their taxes, and give jobs to as many people as possible. It’s really the middle class and people at the bottom who need to be looked after and given a chance. This is the policy of “middle classisation”. This is what’s actually called politics for the people, when economic policy doesn’t serve abstract, liberal economic interrelationships and macro-indicators, but actually serves the interests of the people. This is how Trump won, if you followed the US election. And this is increasingly the case. So increasingly European or Western politics is clearly narrowing down to the question of, “Let’s stop all this liberal talk, it’s all very nice, but how are we living? And what’s happening? And do we have a chance? Do our children stand a chance? Will our children be better off than us, or worse off?” It’s interesting that in Central Europe people think that our children will live better, and in Western Europe there’s a tendency – a strong tendency – for people to think that their children will live worse lives. It’s very difficult to give an economy a boost – to jolt it, to pull it upwards – when the people who live in it themselves expect their children to live worse than they do. And in Western Europe this is a common feeling. It’s not the case in Central Europe, where we’re in a much better situation.
Part of the drive to strengthen the middle class is support for pensioners and the elderly. The thirteenth month’s pension will be paid in February this year, but the European Commission has issued a working document that expects the Government to abolish this, and there are voices at home that say it’s not necessary – at least in this form. What should pensioners expect? What will be the fate of the thirteenth month’s pension in the long term?
The truth is that I think people don’t know what a struggle it is to pay the thirteenth month’s pension, that it’s the result of a battle. It’s not just a question of raising the money for it, which is also a fine task in itself. The reason that we’re talking about the 500 billion forints that we usually pay out at such times, and of course that we’re talking about our own past, is that if we want to make our nation a winner – and unlike the cynics we want to do that, we want to see a victorious nation – we have to overcome the old problems. And one of these old problems – which everyone remembers and which was personal and not just felt in our pockets but also in our flesh – was the taking away of the thirteenth month’s pension. You can’t be a victorious nation if you’re unable to build on or renew or repeat what you once achieved. So if we can’t restore the thirteenth month’s pension, that was taken away in the Bajnai–Gyurcsány era, who will believe that we’re facing times that are better than those in the old period? So the restoration of the thirteenth month’s pension is also a precondition for us Hungarians to believe that of course there were problems, that the left-wing governments caused all kinds of disruption here before 2010, but that we’ve put that behind us, and we can again achieve at least what we had then. The thirteenth month’s pension is therefore a psychological and political issue – and, after that, an economic issue. For pensioners, of course, it’s primarily a social and economic issue, but from the point of view of the national economy it’s much more than that. This is why I’m fighting. The Brusseleers want to take away the thirteenth month’s pension. They say it’s not good, and this is why we should get rid of it. Every year before the heating season they come up with these studies – recommendations, they call them in Brussels – in which they try to force something on us and rub our noses in something. They call them recommendations, and they must be rejected. And we must defend this stance. Then there will be all kinds of sanctions and all kinds of debates, but we’ve defended it so far, and I insist on it because of what I’ve just said, because of the pensioners and because of the impetus that the restoration of the thirteenth month’s pension represents: faith and hope in the future. And it’s very important for pensioners. Wages are rising faster than pensions, but with the thirteenth month’s pension we can bring the rate of pension increases somewhat closer to wage growth. This is more or less where we are. I expect that there will be a battle of this kind, and there are also some proponents of this Brussels idea in Hungary. The economists behind the opposition parties – I won’t name names, and especially won’t bring the ladies into this – are constantly saying that this isn’t right. They don’t dare to say that we should take it away, but it’s not right. All I can say is this: hands off pensions, hands off the thirteenth month’s pension!
Let’s also talk about the threats to economic growth. The Hungarian economy has been growing, but the German economy has been shrinking, and in Berlin expectations for this year have been significantly downgraded, with The Financial Times reporting that Volkswagen is willing to let Chinese car manufacturers take over its surplus European production capacity. How might the weakness of the German economy or the state of the European economy affect Hungary’s economic performance?
Let’s talk a little about this German situation. There’s no need to judge the government of another country, because that doesn’t foster good relations – especially if it’s bigger than you are, and you might just get a swipe to the head. That won’t do anyone any good. And the German bear has a powerful swing, so I’m cautious. Obviously everyone has the government they deserve. And it’s certainly true that there’s a reason for early elections being held in Germany. It’s safe to say that early elections are held because of failures. But we have to recognise that while the Germans are obviously making mistakes, what’s actually destroying Germany is Brussels. The most striking example of this is a story that’s currently unfolding. Brussels has imposed a punitive tariff on Chinese cars, in order to protect European car manufacturers. I’ve spoken to the management of all the major German car manufacturers, and they’ve all protested against this. So while Brussels is claiming that it wants to protect them, it’s introducing something that they say will be bad for them. We’re in the absurd situation that these car manufacturers, these German car manufacturers, are today suing Brussels – the Brussels Commission, which is supposed to have acted in their interests. If this is economic policy in Brussels, then it’s no wonder the Germans are going bust. Of course this has an effect here too. We can defend against this, because the destructive effects of bad economic policy decisions in Brussels, such as in relation to the thirteenth month’s pension, can be cushioned by a national government that’s accustomed to fighting – just as we’re accustomed to fighting for national independence. We cannot – and I cannot – completely eliminate the impact of Brussels’ mistakes in Hungary; but I can dampen them to a considerable extent, and we can always find something to compensate for them. But those who are Brusselites – as the Germans traditionally are – find themselves in distress when bad economic policy is pursued in Brussels, and they cannot really defend themselves against it. The whole Green Deal – the name for this green transition – is a good idea, by the way: making the economy greener, living more healthily, having cleaner air and water, not destroying the environment when we produce, but rather building it up. These are all great things; but to introduce such measures you have to consult with those who run the economy. If you introduce these measures against the car factories, say, or against the big industrial companies that run the economy, then you’ll destroy the economy. The green transition is a typical example of something that’s a good idea which could be enacted in cooperation with business and would be successful; but enacted in opposition to business it’s bound to fail – and, as a side effect, will destroy some European economies, for example that of Germany. Now, the effect of this in Hungary. I’m not a fortune teller or a clairvoyant, but it is my job to try to understand the future. I don’t predict a great future for what’s happening in Western Europe today. So if the large states don’t take back their independence, if they don’t stand their ground, if this Brusselite bureaucratic elite continues to sit in its bubble delivering sermons in Europe, and the big countries fail to reject it, then I can’t predict much for the future – and nor can I predict much for the economies of the large European countries. There are signs of rebellion, because there needs to be rebellion on this. You can’t negotiate with the Brusseleers – I know them, they’ll come back and they’ll be up to all sorts of devious tricks. So on this you need to rebel. But now the Germans, for example, haven’t yet started to rebel on the economy, although they’ve started to rebel on migration: in the last few days what has happened in Germany is something that we have done. In German domestic political debates, the Left have told the conservatives that what they’re doing is something that so far only Hungary has dared to do. Bravo, this is right – and they should have done it in 2016 or in 2015, at the beginning of the migration crisis. In that case they wouldn’t be where they are today: there would be no terrorist attacks, and the economic situation and the burden represented by migration in Germany wouldn’t exist. So I can see signs that the Germans are just rebelling on a single point – not yet on the economy, but on asylum, on migration. And there will come a moment when I think they’ll also take the lead on the economy; but until then unfortunately I can’t say anything good. This is bad for us, because most of the products manufactured in Hungary go to the German and Western European markets. We mustn’t give up these positions, but neither should we stand on just this one leg. This is why it’s strategically important for us to cooperate with China, South Korea, Japan and Turkey, and to bring into the Hungarian economy some of the huge amounts of money in the Arab world. So we’ll lose out if we remain locked into our Western world, if we don’t break out of it through what we call connectivity, if we don’t cooperate with other emerging parts of the world that are developing much faster than Europe, and if we don’t integrate their resources into the Hungarian economy. This is what we used to call eastward opening, and today it’s more relevant than ever.
Among the main threats to growth that you identified recently were energy security and sanctions. The sanctions will certainly remain in place for another six months, but on Monday Hungary received guarantees on energy security in exchange for voting in favour of them. How strong are these guarantees? I’m also asking because on Wednesday there were reports that in Russia the “Friendship” [“Druzhba”] oil pipeline may have been attacked.
Yes, but then it turned out that it was probably more of a scare story: the oil flow didn’t stop, and instead it was due to a technical error which was sorted out within half a day. Now, the sanctions, let’s talk about that. First of all, the Americans and the Europeans are saying two diametrically opposed things. The Europeans are saying that the sanctions must be continued, and even strengthened, in order to allow the Ukrainians to win the war against Russia. In a major interview yesterday the US Secretary of State said that it’s dishonest to deceive the world by claiming that the Ukrainians can win this war. It’s worth following up on this major interview. This is why the Americans don’t want sanctions, but peace. So the Europeans want sanctions instead of peace. The Americans want peace, and one of the means of achieving peace is sanctions. So they’re saying, “Negotiate, and if you don’t negotiate, you may get even more severe sanctions.” But these two approaches are very different. European logic is completely different from American logic: one is war logic and the other is peace logic. We’re now in constant consultation with Brussels – because this is where we live – and with the Americans. So we see how things are developing, we’re coordinating on all issues, and in sanctions matters we know what’s happening, when and where. And we know what’s in Hungary’s interests; they’re affected by the fact that we’ve lost 19.5 billion euros in three years. We must get this back – or at least create years in which the Hungarian economy doesn’t lose 6.5 billion euros a year like this. In other words, the sanctions must be lifted. This is the Hungarian position. We’ve never supported sanctions. We’ve simply taken note of the fact that in Brussels 26 out of 27 countries want sanctions. And since we don’t want to leave the European Union and don’t want to block everything all the time, we’ve kept saying that we don’t agree: it’s against our interests, don’t do it; but we won’t veto it, because otherwise the whole European machine will be paralysed. But now the behaviour of the Ukrainians has brought us to the point at which we’ve had to say “Stop now!” So it’s unacceptable that Ukraine is refusing to allow Russian gas to pass through its territory to reach Central Europe, thereby raising the price of gas and causing the price of everything to rise, including fuel. Therefore we’ve been forced to say very seriously and very firmly that if they don’t change this, we will now lift the sanctions – because a country can do that. So if we really have to, Hungary can say, “Well, now everyone should go home”, like in the poem by Petőfi: turn off the lights and everyone goes home. Sanctions would be over. But this would be very harsh, and so it should only be used as a last resort. And our problem isn’t with the philosophy of sanctions – that’s another discussion – but with the impact on the Hungarian economy. So in Brussels we had to fight for guarantees that Hungarian energy security wouldn’t be jeopardised by the sanctions, and that the sanctions wouldn’t lead to further increases in energy prices, which the Hungarian people would then have to pay for. And we asked for this guarantee. Among other things, the Commission has promised that it will arrange for the Ukrainians to allow Russian gas to flow through Ukraine again. So the Ukrainians are dependent on us: without us they can’t fight for a single day, without us their economy can’t function for a single day. We just need to dig in our heels and say, “Dear Ukrainian Friends, we understand everything, but we need this. Let the Russian gas through! How do you want to get closer to the European Union if you pick on the countries of Central Europe? Stop this!” We needed to raise this with this degree of directness. We’ve been given guarantees. I understand the cynicism and the uncertainty, and I too wonder whether they’ll be honoured. But the fact is that sanctions have to be decided on every six months. And if they’re not complied with, we’ll not only get to the point at which we’ll raise the possibility of removing sanctions, but we actually will remove them. So if the Commission doesn’t now comply with what we’ve agreed, then the sanctions will come to an end. We must now speak in this tone and in this powerful way, otherwise we’ll be seen as suckers, and in the end the Hungarian people will continue to pay the price of sanctions – and even for the Ukrainian impertinence whereby we’ll be financing their war, providing the money for their country to function, while they’re taking steps to make life more difficult for the people of Europe, including the Hungarian people. This is unacceptable!
We have very little time left, but it seems that the sanctions dispute will remain with us in 2025. Meanwhile there are other issues on which the Hungarian government and Brussels disagree. What do you see as the fiercest conflicts in 2025?
The Government has just surveyed this minefield. We have a long list. We’ve been taken to court over the Child Protection Act, and they can’t let this nonsense go: they want to take the place of parents in saying what the process of maturing into sexual adulthood should be, and how we should lead our children into adulthood. For us this is utterly unacceptable. Parties in the European Parliament – and Hungarian opposition parties are also involved in this – are taking us to court to take from us the money that we’ve already fought hard to get from Brussels. I won’t go back over the teeth gnashing that was involved in us transferring this 12.5 billion euros to the account of the Hungarian people. And now we’re being sued by the European Parliament, with Hungarian opposition parties among the claimants, for this money to be taken back from us. Do you understand what I’m saying? The European Parliament, in which Hungarian parties also sit, is suing Hungary for the repayment of the money that we’ve already received from the Commission. Now I don’t want to refer to strong categories in criminal law, but what are such people doing to their country? What’s for sure is that this isn’t serving the country’s interests. And then, of course, we also have the debates on the issue of the reductions in household energy bills, in which, before the heating season every year, they seek to abolish these reductions. We must defend against this. There are these tariffs that penalise a group of goods, and it would be important for Hungary not to be burdened by such tariffs. So we have a list of 7 or 8 points on the minefield through which we need to skilfully manoeuvre in the coming year. We’ve won the battle America, and America now has a government that serves the interests of the people. But the bureaucrats in Brussels haven’t changed, they’re abusing their power, and the fight with them will be constantly on the Hungarian political agenda in the coming year.
Among the topics I’ve been asking Prime Minister Viktor Orbán questions about were the Hungarian growth data released yesterday, its causes and its European background, and conflicts with the European Union.