The level of general government debt must be reduced in the coming years, Minister for National Economy Mihály Varga said at an event organized by the Hungarian Economic Association in Corvinus University of Budapest.
The Minister stressed that the Government intends to increase the number of Hungarian exporters and, concurrently, that of enterprises which are capable of replacing imported goods with their own products. The business conditions of these enterprises must also be improved, he added. Market niches of certain sectors which may provide opportunities for Hungarian companies must also be discovered. These sectors include, for example, the manufacturing of pharmaceuticals, the chemical industry, the manufacturing of medical appliances, water treatment and vehicle manufacturers’ supply chains.
The Minister also said that improving employment continues to be a special priority, and as part of that effort the dual vocational training system, expected to boost the long-term competitiveness of the country, is to be launched as of September 2015.
Mihály Varga pointed out that expert opinion on Hungarian economic growth outlook has turned favourable and investment houses such as Morgan Stanley or international institutions such as the IMF also see Hungary’s GDP growth in a more positive light.
He called attention the fact that in 2010, when the second term of the Orbán government began, Hungary was looked upon as one of ten countries on the brink of bankruptcy, while last year Hungary was ranked as second in terms of GDP growth among the 28 members of the EU. Similarly, while Hungarian 3-year government bonds yield 2 percent for investors, similar Greek securities can only be sold for 20 percent interest.
He said that in 2014 Hungarian exports had a bumper year, as the value of exports exceeded EUR 100bn, thanks partly to the well-aimed programmes of Eximbank and the MNB’s Funding for Growth Scheme.
The Minister emphasised that in 2002 the country’s debt-to-GDP ratio had been 53 percent, it had jumped to 83.5 percent by 2010 and by the end of 2014 it could be brought down to 76.9 percent. He mentioned among achievements of the period 2010-2014 that the share of forex debt within the total amount of government debt was reduced to below 40 percent by the end of the last year.
Boosting hiring has also been among priority fields, he said, as Hungary continues to build a workfare society and the flat-rate personal income tax also encourages people to work. In comparison to 2010 data, by the end of 2014 the number of people in employment was up by 420 thousand.
As another growth factor, in the EU fiscal period 2014-2020 Hungary plans to spend 60 percent of EU funding on economic development projects, in contrast to the 16 percent figure in 2007-2013.
(Ministry for National Economy)
