Varga deems OECD report confirmation of economic success

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Géza Dede/Ministry for National Economy

A country report on Hungary by the OECD released on Friday is confirmation of the countryʼs economic success, National Economy Minister Mihály Varga said, state news agency MTI reported today.

(Photo: Géza Dede/Ministry for National Economy)

The OECD report acknowledges Hungaryʼs economic growth, the reduction in state debt, a decline in external vulnerability, a rise in the number of jobs and the employment rate, and a current-account surplus, Varga said. 

OECD Secretary-General Angel Gurria said Hungary has made great progress over the last several years correcting macroeconomic imbalances, reducing state debt as a percentage of GDP and running a current-account surplus.

Hungaryʼs exit from the crisis was supported by the phasing out of FX loans, which sharply reduced householdsʼ financial risks, Gurria said. He also noted that stock of non-performing loans in the banking sector remains high, and lending activity restrained.

The OECD acknowledges economic policy measures taken in the past year, but the countryʼs productivity still puts it at a disadvantage compared to other countries in the region, Gurria said. He noted that Hungaryʼs productivity had fallen by 0.6% since 2008, even as Polandʼs rose 2%-2.5%. To correct this, the education system must be further restructured and women must become more active on the labor market, he added.

Hungary is also behind in terms of per capita income, which stands at about 60% of the OECD average, Gurria said. The rate has improved markedly from 46% earlier, but is still behind, he added.

He remarked that Hungaryʼs personal income tax is rather low, but taxes on labor remain high.

Gurria said the number of women employed in Hungary is lower than the number of men, and those women who do want to join the labor market face a number of obstacles. The state needs to do more to raise not just the number of kindergarten spaces, but the number of daycare spaces as well, while making services available to mothers who want to return to work a year after giving birth, he added.

Varga said the OECDʼs recommendations are in line with the governmentʼs goals, which include developing vocational education. The government is committed to raising employment further and re-industrializing the country, putting a focus on high value-added sectors, he added.

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