“The Hungarian investment promotion system will undergo fundamental change next year”, Minister of Foreign Affairs and Trade Péter Szijjártó said at an event organised by the German-Hungarian Chamber of Commerce and Industry.
“The more large international companies establish themselves in Hungary and the more international companies expand their existing capacities in Hungary, the better it will be for small and medium-sized enterprises and the more small and medium-sized Hungarian enterprises can become part of the supply chains of these companies”, Mr. Szijjártó stressed.
“The Government can provide the most help to small and medium-sized enterprises by creating the opportunity for these small enterprises to become part of the supply chains of large international companies”, he said.
The Foreign Minister also said that the agreement on wage increases and the reduced tax burdens on enterprises will create the opportunity for a further increase in Hungary’s competitiveness.
“The reduction in corporate tax to 9 percent enables a significant acceleration in the rate of investment of the past one-and-a-half to two years and the reduced tax burdens will facilitate the beginning of a period of increasing wages and salaries in Hungary”, the Minister said.
With relation to foreign investments this year, Mr. Szijjártó told reporters: “The Hungarian Investment Promotion Agency concluded 64 investment agreements up to October of this year, which are creating a total of some 16 thousand jobs. 67 contracts were signed last year, with the creation of 13 thousand new jobs, which was a record in the history of the HIPA”.
“More has been invested in Hungary via the HIPA than ever before up to October of this year: 3.2 billion euros as opposed to 1.4 billion euros for the whole of last year”, he pointed out.
“Next year, the Government will be restructuring the various elements of investment promotion and subsidising. When deciding on awarding non-refundable funding from the budget, the chief criteria will no longer be the increase in the number of workplaces, but technological development”, Mr. Szijjártó said.
“The Government will also be facilitating the financing of technological development projects that help maintain workplaces out of its investment promotion budget, in which case maintaining jobs will be sufficient to receive funding from the budget”, the Foreign Minister explained.
“Another new element will be the fact that the Government will also be launching a programme aimed specifically at supporting research and development, and this funding will also be available in Budapest”, he added.
According to the Managing Director of the Hungarian National Bank, Barnabás Virág, a “high pressure economy” could present a long-term convergence opportunity not only for Hungary, but also for the region’s other countries.
“The essence of the concept is that companies respond to job market difficulties with higher salaries and more, increasingly expensive information technology solutions, which improves productivity”, Mr. Virág highlighted, adding that the Hungarian National Bank still does not believe in negative interest rates and will continue to strive to maintain the current basic interest level of 0.9 percent.
(MTI)
