Hungary’s growth should focus on savings, developments

Ratings

(Photo: MTI/Zsolt Szigetváry)

In order for Hungaryʼs economy to grow, the country needs to shift its focus toward domestic savings and developments, National Economy Minister Mihály Varga said at a conference hosted by business daily Világgazdaság today, according to reports.

Economy Minister Mihály Varga speaks at a press conference on May 21 following the Fitch Ratings upgrade. (Photo: MTI/Zsolt Szigetváry)

Varga stressed that a shift towards long term goals could help promote economic growth in the event that EU funding or other external resources dry up. The minister was speaking at a conferenced entitled “Hungary in ten years: Visions, trends and hopes”.

To this end, the government needs to make further tax cuts and provide additional incentives for investments, while also maintaining a tight fiscal policy, Varga said.

Reducing unemployment by providing Hungarians with skills most in demand would reduce the size of Hungary’s labor reserve and serve to promote economic growth.

Hungaryʼs 3% annual growth rate has been pushed along by an “8% tailwind” of which 5% is derived from EU funding and 3% from improved terms of trade, Fiscal Council head Árpád Kovács said during the conference, according to Hungarian news agency MTI.

Hungaryʼs rate of economic growth is mediocre for Europe and must be improved, Kovács reportedly added.

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