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2013 budget based on turnaround in investments, Matolcsy says

Initiatives

The government's 2013 budget bill is built on a turnaround in investments, and it ensures appropriate funding for them, National Economy Minister György Matolcsy said on Wednesday, presenting the bill to Parliament. Investments in Hungary have been on the decline for three years, and last showed any significant growth, of 4.3%, in 2005.

     Matolcsy said HUF 2,000 billion in development funding will be available next year in the framework of the New Széchenyi Plan, up from HUF 1,400 billion-1,600 billion this year.

    "The budget will help us to achieve growth of about 2% or perhaps more next year", Matolcsy said.

    The budget bill was drafted assuming GDP growth of 1.6%, a rate the Fiscal Council said presented downward risks.

    Next year's budget will be one of increase, after two and a half years of successful consolidation, and it will support the creation of 100,000 jobs, he said. It will also preserve the country's more than 3.8 million workplaces at present, he added.

    Matolcsy said there will be almost 200,000 more workplaces in Hungary at the end of 2013 than when the government started its term a little more than two years ago. The government will do everything in its power to find the resources to reduce the burden on labor while keeping the deficit target, he added.

    The participation of 300,000 people in the Start public work program will contribute to the turnaround in employment, he said. While acknowledging criticism of the program by some, he noted that wages earned by participants in Start are still more than welfare payments. He added that public work programs are not a long-term solution but give participants "a taste of work".

    Matolcsy confirmed that the budget bills targets a general government deficit of 2.2% of GDP and a primary surplus (excluding interest payments) of 2% of GDP. State debt is set to fall to 76% of GDP in 2013 from 78% in 2012, he said.

    Matolcsy said the budget bill is based on restructuring measures outlined in the Széll Kálmán Plan 1.0 and 2.0 as well as improvements at the state, local council and household levels. "We are not finished with the reforms, but we have started," he added.

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