As a result of the civic government’s fiscal policy, similar to earlier years, last year, too, the percentage of sovereign debt further decreased to 73.6 per cent of GDP, while the budget deficit amounted to 2 per cent of GDP in line with the government’s expectations, the Minister for National Economy stated evaluating the data published by the Central Statistical Office for the spring EDP report.

The fiscal policy of recent years has been characterised by the continuous reduction of the percentage of sovereign debt and the maintenance of stability in state finances, Mihály Varga stressed. He added that at the time of the change of government in 2010, the civic government was faced with a sovereign debt of 83 per cent to GDP with a tendency to rise, while in 2017 they managed to maintain the downward trend which has been ongoing ever since. Last year the sovereign debt to GDP, including Eximbank, decreased from 76 per cent in 2016 to 73.6 per cent, and based on the former methodology of calculation from 73.9 per cent to 71.7 per cent. This means that the rate of the Hungarian sovereign debt decreased even despite the fact that, at Eurostat’s request, the Central Statistical Office included Eximbank in its calculation of the country’s sovereign debt. At the same time, the Hungarian position that Eximbank cannot be regarded as an item that is suitable for categorisation within the sovereign debt remains unchanged, the Minister for National Economy pointed out.

Regarding the deficit of the budget, the Minister said that in 2017 he set a deficit target of 2.4 per cent to GDP which eventually fell to 2 per cent in accordance with the government’s expectations, while the deficit figure for 2016 was 1.7 per cent. This is in line with the sequence of deficit data observed in recent years as beyond the fact that in 2013 Hungary was finally removed from the excessive deficit procedure instituted against it in 2004, during the term of the socialist-liberal government, in the past few years the deficit has remained below 3 per cent to GDP every year, thereby guaranteeing stable and predictable finances and a positive investor environment, Mr Varga highlighted.

Compared with 2010 the minimum wage has effectively doubled by 2018 (increasing from HUF 73,500 to HUF 138,000), as has the guaranteed wage minimum for qualified workers (increasing from HUF 89,500 to HUF 180,500). During the civic government the number of people in employment has increased by 750,000, while unemployment has fallen from 11.8 per cent in 2010 to 3.8 per cent. Meanwhile the Hungarian economy has embarked on a long-term growth path which is proved by last year’s 4.2 per cent growth to GDP. In addition to the declining debt rate and the low deficit, these constitute the main economic policy achievements of the civic government in office between 2010 and 2018 which must be borne in mind under any circumstances, in particular, with the approaching parliamentary elections, the Minister for National Economy pointed out.

(Minister for National Economy)