The Government has raised this year’s economic growth projection from 2.5 per cent to date to 3.1 per cent, Péter Benő Banai, State Secretary for Budgetary Affairs of the Ministry for National Economy announced in a Thursday afternoon programme of the television channel M1.

The State Secretary was interviewed in connection with the fact that the Cabinet has submitted the updated convergence programme to the European Commission. The State Secretary said that the GDP projection has been raised in the light of recent positive data.

Mr Banai said that the convergence programme contains the Government’s official projections up to 2018; based on these, we may expect a growth rate in Hungary in excess of the EU average.

The State Secretary also said that this year’s target budget deficit of 2.4 per cent was confirmed in the document.

Péter Benő Banai pointed out that the higher growth rate also has its effect felt in everyday life. It will manifest itself, among others, in the fact that we shall continue to experience an expansion in employment also during the years to come.

The State Secretary stressed that the favourable processes in the real economy may constitute the foundations of the recently announced tax reduction.

Mr Banai also mentioned that they have reckoned with the reduction of the tax on pork to 5 per cent in the convergence programme.

The State Secretary reiterated that the bank levy will decrease by some HUF 60 billion as of 1 January 2016, and the hope is that the reduction of the bank levy will result in the intensification of lending. In the convergence programme submitted to the European Commission, they reckon with further bank levy reductions in the future, he added.

The convergence programme lays down regarding the 2016 plans that the growth rate of the Hungarian economy will be 2.5 per cent, the deficit of the budget will not exceed 2 per cent, and the rate of inflation calculated for next year will be 1.6 per cent. The lower inflation rate is attributable to two factors: the reduction of the VAT on pork and the relatively strong forint, the State Secretary said.

In its press release, the Ministry for National Economy emphasises that the Government is committed to making the results achieved to date sustainable, and to creating a stable and predictable environment in the interest of the dynamic growth of the economy.

Household consumption may further increase during the years ahead, the increased demand for work force will result in increased average earnings, and against the background of a steady growth, the balance of payments may generate a considerable surplus. The measures taken by the Government and the improved employment figures will further increase the population’s disposable income which will, in turn, also boost consumption, the press release of the Ministry reads.

According to information supplied by the Ministry, Hungary has also sent its national reform programme to Brussels.

EU Member States develop national reform programmes on the basis of the general EU goals, in which they describe the policies and measures they wish to implement in the interest of maintaining sustainable development and employment and attaining the targets determined in the Europe 2020 Strategy. Simultaneously with the development of a national reform programme, each EU Member State is also required to submit to the European Commission a stability or convergence programme in which they outline their fiscal plans for the coming 3 to 4 years.

(MTI)