The government's current crisis-management measures and tight budget policy will give the country an advantage in the long term, establishing the conditions for economic growth when the upturn starts, Finance Minister Péter Oszkó said at an event organized by foreign business chambers in Hungary on Tuesday.
Hungary's growth rate could jump in 2011 and 2012 after the present phase of restrictive crisis management if the next government goes on with a tight and consequent economic policy, Oszkó said.
The government continues to project a 0.9% economic contraction for 2010 which could be followed, however, by growth of 3% or more from 2011 on, he said.
Foreign investors sent a clear message to Hungary at the start of the crisis by stopping purchases of government securities because they saw the country's high level of state debt as too risky and economic growth too low, Oszkó said. Hungarian households' high level of debt also strained domestic demand, causing another problem, he added.
For these reasons, the government concentrated on reducing the level of state debt and improving economic competitiveness, he said.
Hungary's next government will have to continue the current one's economic policy, because budget consolidation in and of itself will improve the country's competitiveness, he added. (MTI-Econews)