The European Commission's building in Brussels – Photo: wikipedia

Finance minister: EU acknowledges Hungary’s economic recovery

The European Union acknowledges that Hungary is on the path to economic recovery from the coronavirus crisis, Finance Minister Mihaly Varga said on Friday, noting that the European Commission has raised its projection for Hungary's GDP growth this year to 5 percent from 4 percent.

Speaking to Hungarian reporters after a meeting with his EU peers in Luxembourg, Varga said the EU’s forecast put Hungary at the sharp end of the European field, noting that it trails only three member states in terms of projected growth.

This year’s and next year’s budgets both guarantee the resources needed for an economic recovery, Varga said. The 2022 budget guarantees the funding needed to support families, raise pensions and wages and finance investments and social programmes, he added.

Concerning Hungary’s VAT regulations, Varga said the government’s decision to reduce the VAT on internet services to 5 percent had garnered praise from the EU.

“If we accept that the internet is an everyday need and a part of our work and our lives, then it was worth including it among the goods and services that are subject to a lower VAT rate,” Varga said.

The minister said his EU counterparts had approved Hungary keeping a low VAT rate on internet services at Friday’s meeting.

On another subject, Varga said the European Commission could approve Hungary’s post-pandemic recovery and resilience plan by the end of July.

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