Hungary needs fresh capital, corporate loans, expanding markets to grow - Matolcsy
Hungary's economy needs fresh capital, credit for businesses and expanding markets to keep it from slowing to the level of stagnation, National Economy Minister György Matolcsy said late Friday.
Hungary kept itself from default in the second half of 2010, and this year a renewal and restructuring were launched that could make Hungary more successful within a few years, Matolcsy said, speaking after a conference. Hungary must still face new sources of danger, such as the crisis in the eurozone, he added.
The Hungarian economy is no longer vulnerable because of the budget or state debt, but growth is in danger, he said.
The government's early foreign currency-denominated mortgage repayment scheme could bring 150,00-200,000 people out of the trap of debt, which is a key for economic growth, Matolcsy said. A new home creation system has also been launched and could produce results along the lines of a similar program started in 2000, he added.
Home construction more than doubled under the earlier program, and the new program is expected to do the same in a few years, he said.
Programs have started that make better use of European Union development programs and that compensate for resources "sucked out" by banks, he said. The government is working on a new lending system as "the parents of foreign-owned banks have sucked out several thousand billion forints, and that money has to be replaced", he added.
The change-over to the proportional 16% flat-rate tax system will be complete over three years, Matolcsy said.
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