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Kármán put 2027 GDP growth at “over 2%.” He acknowledged the impact of the growth outlook on the budget deficit.
Kármán said European Union finance ministers had unanimously approved Hungary’s modified Recovery and Resilience Facility (RRF) plan at a meeting in Brussels a week earlier. The decision unlocks more than EUR 10 billion in resources, but Hungary could access a further EUR 6.4 bln in cohesion funds if it fulfills certain conditions, he added.
Kármán affirmed the government’s commitment to restoring the rule of law and said a significant part of the super milestones on which payouts of the funding hinge had already been met, ahead of the end-August deadline.
Close to 60% of the RRF funding will support the green and digital transitions, including HUF 1.5 bln for electricity grid upgrades to accommodate more renewables, he said. Another EUR 1.8 bln will go to public transportation upgrades, with EUR 1 bln to replace railway carriages and EUR 800 mln to finance new rapid suburban railway trains.
He noted that EUR 2 bln from the RRF monies would raise capital at the Hungarian Development Bank (MFB), supporting SME lending.
Kármán said EUR 2.6 bln of the RRF funding was for projects that are underway or have already been completed, backed by pre-financing from the budget. Those transfers from Brussels will improve fiscal room for maneuver, he added.
Kármán said the government would draft a mid-term budget plan by the autumn.
Fielding questions, he criticized the former government for losing EUR 2 bln of Hungary’s European Union funding, which showed up in a downturn in investment volume.
He added that the arrival of the RRF funding would have a positive impact on growth and mobilize private equity.
Kármán said changes to rules on trusts would be tabled to crack down on tax evasion. He added that the government would review some corporate tax preferences and eliminate smaller ones, such as one for the renovation of historic manors.
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