Finance Minister Mihaly Varga – Photo: Facebook

Finance Minister: Strict fiscal policy needed to push average inflation below 5 percent

The government's strict fiscal policy should be continued to push average annual inflation below 5 percent, the finance minister told a conference on Saturday.

In his speech at the iCon economic policy conference in Sopron, in north-west Hungary, Mihaly Varga said that inflation fell to 5.5 percent in December from 25.7 percent in January. The trend is expected to continue this month, he added.

In monetary policy, “the time has come for yields and the base rate to decline.”

The government also aims to bring deficit down from 6 percent to 3 percent, possibly over 2 years to avoid adverse consequences on growth and unemployment, he said.

This year, deficit is expected to be in the 4-4.5 percent range, he added.

Meanwhile, EU funds worth some 520 billion forints (EUR 134.5m) have been disbursed to Hungary since December, the ministry cited Varga as saying. The government is expecting another 2,500 billion forints in 2024, he added.

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