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Fiscal cost of family support measures to reach 0.3% of GDP

The fiscal costs of family support measures unveiled by the government in February are expected to reach the equivalent of 0.3% of GDP this year, and 1.1% of GDP next year, but will not impact the general government deficit target in either year, a senior official of the Ministry of Finance said on Thursday.

Speaking at a conference organized by the Hungarian Economic Association, state secretary Gábor Gion said that the measures could lift GDP growth by 0.1-0.2% this year, and by 0.3-0.5% next year, state news wire MTI reported.

A month earlier, the National Bank of Hungary (MNB) estimated the fiscal cost of the family support measures would reach the equivalent of 0.1% of GDP this year, climbing to around 0.4% of GDP in 2020 and 2021.

The additional family support measures, which include interest-free credit for prenatal support, subsidies for new cars, and an increase in the number of places in creches, among others, were announced by Prime Minister Viktor Orbán in February as part of the governmentʼs efforts to deal with depopulation.