Incoming economy minister Mihály Varga put Hungary's GDP growth in a range between 0.5% and 1.0% in an interview published in daily Magyar Hírlap on Tuesday. “Hungary's economic growth could reach 0.5%-1.0% this year, according to our expectations,” Varga told the paper.
Credit has become cheaper because of the National Bank of Hungary's rate cuts, Hungary's risk premium has fallen and the labor market situation has improved, he said, citing indicators that support the forecast. The government's official projection for GDP growth in 2013 is 0.9%. But the European Commission said in a forecast in February that Hungary's economy would probably contract by 0.1% this year.
Varga said the government could reconsider the need for a levy on banks if economic growth picks up. “If the Hungarian economy starts to grow, the necessity of the special tax can be considered,” he said. “There can be no growth without a well-functioning banking system,” he added.