Gergely Gulyas – Photo: MTI

Russian gas to arrive via Serbia and Austria in the future

Gulyas: 2021 GDP growth ‘definitely’ above 5.5 percent

Hungary's economy will "definitely" grow by more than 5.5 percent this year, and the figure could even reach 7.5 percent, the prime minister's chief of staff told a weekly government press briefing on Wednesday.

Gergely Gulyas said the growth figure meant the government’s plan to partially reimburse the personal income tax of working parents could be realised. He said that the reimbursed amounts will be calculated based on the average wage and payments will be made early next year.

Referring to a report by the finance minister discussed during a cabinet meeting earlier in the day, he said it was inconceivable that this year’s growth rate would be below 5.5 percent, and he welcomed “the highest growth rate in the past 31 years”.

By how much higher growth may be would depend on pre-Christmas consumer turnover, he said, adding that “hopefully no new developments, even amid the pandemic, will negatively impact the economy”.

Meanwhile, Gulyas said that the government’s agreement with Russian energy giant Gazprom would ensure that the achievements of government-mandated utility cuts were preserved. Thanks to the 15 year agreement signed earlier this week, Hungarian consumers will continue to pay one of the lowest gas prices in the European Union, he said. The current deal is much better than the one it is set to replace, signed in 1995, in terms of the Hungarian state’s liabilities, he added.

Gulyas noted that the annual 4.5 billion cubic metres of gas to be received under the new deal will be delivered via two routes: 3.5 billion cubic metres from the south, through a new Serbia-Hungary interconnector, and one billion cubic metres through Austria. He said the deal was of great significance in view of unprecedented natural gas and electricity price hikes on the global market.

Gulyas highlighted government measures made in recent years which curbed the price of household utility bills by 25 percent since 2013 irrespective of inflation. Currently Hungarians pay 40 percent of the average European electricity price, he added.

Concerning Hungary’s gas reserves, Gulyas said that the country had the seventh largest amount stored in the EU, with 83 percent of all storage facilities full.

Gulyas said that should the opposition make good on their proposal to unfreeze energy prices, an average Hungarian household would have to pay 386,000 forints (EUR 1,070) more in energy bills annually.

Referring to the Covid situation, the minister urged unvaccinated citizens to get the jab. The country’s vaccine capacities, he said, were “infinite”, and anyone could choose between six vaccine types.

Gulyas also announced that the government will hold an away meeting at Hajmasker, in western Hungary, on Thursday, and view a military exercise jointly conducted with German troops.

In connection with a visit by a delegation of the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE), Gulyas said most of its members were expressly in Budapest to “insult Hungary” and “help the opposition”. He insisted that their criticisms of Hungary were unfounded.

He added, however, that as a matter of courtesy, the government welcomed the delegation and the justice and interior ministers would meet them. The prime minister, he said, had important matters to attend to so he would not receive the LIBE delegation.

Meanhile, Gulyas congratulated the winner of the German election, saying that he trusted Germany would continue to be a predictable partner and adding that economic relations were highly important.

Gulyas said whatever new coalition emerged was expected to have narrower differences between its parties than ever before, and these parties, he added, were not especially known for their understanding of central Europe.

Whether or not there will be a deal on the EU recovery fund was hard to say but negotiations were ongoing, Gulyas said. On certain issues progress has been made, he said, but the government refuses to adhere to the demands made by the European Commission regarding Hungary’s child protection law in their current form since ‘there’s no basis for such a request under EU law’.

On the topic of the opposition primaries, he said 8 percent of those eligible to vote had taken part in the first round. He insisted the primaries were for show and the winner would inevitably be the mayor of Budapest, Gergely Karacsony.

Regarding the Covid situation, he said revealing data on fatalities of the unvaccinated would be problematic in terms of personal data protection and a sense of decency. But those who have been inoculated have a much lower chance of getting seriously ill and dying, he added.

Government spokeswoman Alexandra Szentkiralyi noted the second round of vaccinations for 12-19 year-olds had recently taken place and a majority had received the vaccine. With a vaccination rate among teachers of around 85 percent, she added, there have been no school closures.

Regarding the referendum on Fudan University, the government’s standpoint is that the university will be built according to the wishes or otherwise of Budapest residents. The Fidesz group leader supports the opposition initiative to hold a referendum on election day, she noted, adding however that current regulations are unclear as to whether this is possible or not.

Commenting on Prime Minister Viktor Orbán’s visit to the Czech Republic on Wednesday in reply to a question about whether it would be possible for Hungary to purchase a 51 percent stake in a Czech company manufacturing military aircraft, Gulyas said: “We’re glad if we’re able to acquire Hungarian ownership in important foreign companies”.

Regarding inflation, he said the central bank was taking the required action and the current level was expected to be temporary, with inflation possibly easing within a year.

Answering a question about Hungary’s Gazprom gas contract, he said Hungary would be paying much less to the Russian giant than before, but the price was a business secret. The energy mix, he added, would not change in the future, neither would the proportion of Russian gas as part of it.

Gulyas said that illegal migration to Hungary was eight times as high as in recent years, adding that border controls needed to be reinforced.

On another subject, Gulyas said that the government supported that teachers’ wages should be raised, but added that a relevant decision had not been adopted.

Concerning meals to students at school, Gulyas said that the government was working to ensure that their price should not be raised above inflation, and noted that most children from kindergarten throughout secondary school were receiving those meals free of charge.

Answering a question about an investigation into the finances of the Antall Jozsef Knowledge Centre, Gulyas said that though the centre had not violated the rules of law, some of its purchases were “unjustified” and certain payments it had made were “morally questionable”, therefore it would not be subsidised from public coffers in future.

In another development, Gulyas said that Ukraine had started taking “revenge” on ethnic Hungarians during Hungary’s talks with Russia on gas supplies, and the Hungarian government would thwart association talks between Ukraine and NATO. He said, however, that “we would like to resume dialogue”, adding that Hungary would continue to make humanitarian and political gestures towards Ukraine.

Concerning the coronavirus situation, Gulyas said he did not see “an urging demand” to lift restrictions so that by-elections could be held, but added that it was “inconceivable” that next year’s parliamentary elections should be postponed because of a coronavirus-related emergency.

Leave a Reply