Marton Nagy - Photo:

Economic development minister: Hungary economy seeing ‘more and more encouraging results’

The Hungarian economy is seeing "more and more encouraging results, but under no circumstances can we sit back", Economic Development Minister Marton Nagy told business portal Vilaggazdasag in an interview on Friday.

Nagy said 2023 had been “our most difficult year to date”, arguing that after the pandemic, the effects of the war and the related sanctions had “put everyone in a difficult situation”. Inflation was high at the beginning of the year, and investments and consumption were also down, he said, adding that the government still managed to protect families and jobs.

Not only had the government protected jobs, but employment continued to rise and the number of registered jobseekers fell to a historic low this year, Nagy said. The Hungarian economy, he added, had shown itself to be crisis-resistant, and the measures introduced by the government had proven effective and efficient.

The minister noted that GDP growth rebounded in the third quarter, with the Hungarian economy registering one of the fastest quarterly growth rates in the European Union. The government managed to push down inflation to 7.9 percent by November, which is likely to have dropped to around 6 percent by December, he said, adding that the country’s twin deficits were also “a thing of the past”.

The economy is also seeing a constant inflow of FDI, and confidence in the Hungarian economy remains unbroken, as reflected by the successful government bond issuances and credit rating affirmations, Nagy said. Meanwhile, real wages started growing again from September, he added.

“This crisis will not pass, but has to be overcome while we become more competitive, efficient, productive, digitalised and green,” the minister said.

Nagy said that in order to restore economic growth, it was key to restore household consumption, boost domestic production and investments and continue to increase labour market activity. He said the government aimed to keep the investment rate above 25 percent, to which end it will launch a new credit scheme. He added that another goal was to raise the activity rate in the 15-64 age group from the current 78 percent to 85 percent.

Nagy said he trusted that economic growth would be around 4 percent this time next year, that real wages would continue to grow and inflation would be pushed further down.

The minister reaffirmed that Liszt Ferenc International operator Budapest Airport would be in state ownership by this time next year.

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