Last year, Hungary’s GDP grew by 4.2 percent, the largest increase in 12 years. With this, the economy has disproved several gloomy market prognoses, among them those envisioned by credit rating institutions, Minister of State for the Utilization of EU Funds Balázs Rákossy said at a conference organized by business daily Világgazdaság.

Hungarian economic growth has been broad-based, robust and sustainable, he added.

Thanks to the improvement of economic balance indicators and financing capacity, external debt has been declining rapidly, the budget deficit has been low for years and the government debt-to-GDP ratio has edged down to 72-73 percent, the Minister of State pointed out.

The six-year wage agreement concluded in autumn 2016 has been a major determinant behind this favourable macro-economic situation, he stated.

The Government has stimulated economic growth through various tax incentives, the acceleration of the disbursement of EU funds and other pro-growth measures, Balázs Rákossy noted, adding that these efforts have also been underpinned by the positive economic environment.

The six-year wage agreement has generated about one-fourth of GDP growth last year. This year, the pace of growth is expected to be similar to last year’s or even higher, he said.

As National Research, Development and Innovation Office President József Pálinkás said, Hungarian enterprises had to prove competitive on the international stage, and the best way to prepare for that was real competition within the country.

Zoltán Pogátsa of the University of Sopron said that long-term growth requires a higher amount of spending on education, re-training, healthcare and social issues. Economic conversion demands that the share of expenditures in percentage of GDP be higher than the EU average concerning education, training and healthcare.

(Ministry for National Economy)