Marton Nagy - Photo:

Nagy: Government determined to bypass recession this year

The Hungarian government is determined to avoid a recession this year, and its goal is to secure growth of 1.5 percent this year following 4.5 percent growth in 2022, notwithstanding the mounting economic challenges, Marton Nagy, the minister of economic development said on Tuesday, opening business lunch of the Hungarian-French Chamber of Commerce and Industry.

Nagy also said that inflation and the twin deficits must be handled, and for this the government’s economic policy must always be innovative.

Inflation is expected to fall to the single digits by year-end, he said, adding that the public budget deficit would ease to around 70 percent of GDP.

Among the economic challenges, Nagy noted the European energy crisis and the bloc’s falling competitiveness, the re-ignition of China’s economy, and an impending US-EU trade war.

Bearing in mind Hungary’s export- and investment-driven economy, new financing structures and fresh energy, industry, and employment policies are needed, he said.

Further, fresh thinking on industrial policy is needed alongside a reappraisal of strategic sectors, with the vehicle industry, battery production, health and pharmaceutical industry, energy industry, food industry, research and development, higher education, transport, logistics, telecommunications, tourism, banking and insurance sectors, military industry as priority sectors, he said.

A greater number of better quality investments must be brought to Hungary, the minister said, stressing the importance of improving competitiveness and cutting red tape.

Investments in Hungary are likely to reach 20,000 billion forints in 2023, the annual inflow of FDI in relation to investments overall must be kept above 20 percent, he said.

In 2020, French companies accounted for the fifth highest amount of FDI in Hungary, he noted.

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