In the drafting of the Budget 2019 the Government’s priorities were to safeguard Hungary’s security, maintain economic growth and achieve full employment, Minister of Finance Mihály Varga said at a press conference earlier today.

Next year’s budget is focusing on safe growth as well as prudent and provident public finance management, he added.

Hungary’s financial and economic stability must be preserved, the country’s safety and border protection must be secured and illegal migration must be tackled in line with the wish of the Hungarian people, Mihály Varga noted.

The Government is predicting economic growth of 4.1 percent, a state budget deficit of 1.8 percent, inflation of 2.7 percent and a lower government debt-to-GDP ratio for the year 2019. Similarly to the trend in recent years, a zero-deficit balance is projected in the operation of state affairs; a deficit may only occur with regard to investment and development projects. The outlook of the Hungarian economy is favourable, the growth fundamentals are sound; however, the euro-zone shows signs of potential turbulences, therefore the amount in the   Country Protection Fund and that of the reserves earmarked for extraordinary government measures is set to rise by 150 percent, he said.

Next year, the 15 percent personal income tax rate, one of the lowest in Europe, is to remain, while tax reductions will continue. The amount of family tax allowance for families with two children is set to rise to HUF 40 thousand, and the rate of social contribution will fall from 19.5 percent to 17.5 percent. This measure is expected to leave more than HUF 100bn at enterprises.

For the support of housing, some HUF 242bn are set aside in next year’s budget. The budget also guarantees the value of pension benefits and an additional pension premium provided the rate of economic growth reaches a certain level. As a new element aimed to facilitate the employment of pensioners, only personal income tax and no payroll taxes will be levied on the wage which an old age pensioner earns on top of the pension benefit he receives. Pro-growth investment projects are set to continue; the value of projects planned to be implemented next year is seen to total HUF 4000bn.

In the budget, there is manouvering room for a comprehensive wage hike for government employees and other public servants: the Government will decide about the timing and extent of pay rises in the autumn, the Minister of Finance stated.

Speaking of the schedule of the budget debate, House Speaker László Kövér said that the general debate was to begin on 27 June and the final vote was set for 20 June.

(Ministry of Finance)