The main economic policy task of the next four years will be to step up economic growth, Minister Mihály Varga told MTI, presenting Hungary’s Convergence Programme for 2018-2022.

The further improvement of competitiveness and productivity are vital; facilitating innovation, the implementation of infrastructural projects as well as the support of higher value added services and products are indispensable for this end, he noted.

The Government has achieved an economic policy trend reversal after 2010, he said. After the groundwork for macro-economic stability and fiscal prudence had been laid down, the re-igniting of economic growth and boosting employment have become the main strategic objectives, he added.

“That is why we have transformed the tax regime in a way which could significantly strengthen (taxation’s) pro-growth effect. We have reduced both taxes on labour and the rate of corporate income tax.” Among the achievements of recent years the Minister mentioned that the number of people in employment had risen by more than 740 thousand and the unemployment rate had at the same time fallen to a record low of 3.8 percent.

The structure of the Hungarian economy has changed by 2018, Mihály Varga stated. Thanks to a pro-growth economic policy, the Hungarian economy grew by 4 percent in 2017, the growth structure has become balanced and the positive change achieved in balance indicators is sustainable, he stressed.

In the Convergence Programme sent recently to the European Commission, similar economic growth rates are prognosticated for the coming years.

Growth, seen to be well above the EU average, will enable convergence to be faster than before. Maintaining the robust pace of economic growth, prudent fiscal policy and a downward government budget deficit trend will make a government debt-to-GDP ratio of below 60 percent achievable, he added.

As another objective, the Minister said that they wished to see the National Assembly adopt a budget with zero cash-flow deficit at the end of the current term. Thanks to the agreement concluded with employer and employee organizations, payroll taxes are set to decline to below the regional average by 2022. As a result of closer cooperation between enterprises and educational institutions, the vocational training capacity of enterprises may increase further and this is expected to boost employment growth, Mihály Varga said.

(Ministry for National Economy)