Government plans to reduce Hungaryʼs deficit to zero in two years

Initiatives

Géza Dede/Ministry for National Economy

Hungaryʼs government plans to reduce the cash flow-based general government deficit to zero by 2020, while achieving economic growth over the European Union average in 2018-2022, Minister for National Economy Mihály Varga said at the annual opening of the Hungarian Chamber of Commerce and Industry (MKIK) on Tuesday.

The government aims to reduce Hungaryʼs state debt as a percentage of GDP to under 60% by 2022, Varga was cited as saying by national news agency MTI. It also wants to make payroll taxes the lowest in the region by that date, he added.

Fulfilling its promise to create 1 million jobs by 2020, compared to 2010, the government aims to add a further 250,000-300,000 workplaces to the economy, the minister said. Another aim is to raise the number of apprenticeship contracts with students in vocational training from 53,000 to over 75,000 by 2022, he added.

The profiles of 3-5 Hungarian companies need to be raised so their brands become globally recognized, Varga argued. These companies could be bus manufacturers or makers of medical equipment, for example, he added.

In addition, Varga said the National Tax and Customs Administration (NAV) needs to become a "paper-free institution" in two years.

Speaking at the same event, György Matolcsy, governor of the National Bank of Hungary (MNB), said that lower interest rates and yields in the wake of the MNBʼs monetary policy easing are expected to save the budget some HUF 750 bln this year.

Hungary needs to maintain its knowledge-intensive growth, but it must also boost capital-intensive growth, Matolcsy added.

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