We focused on cutting deficit, strengthening budget reserves, Hungarian economy minister tells Bloomberg

The Hungarian government is focusing on cutting the deficit and strengthening budget reserves, and investors will have to wait for a significant stimulus package from the government, Finance Minister Mihály Varga told Bloomberg news agency on Tuesday.

“I believe that in these turbulent times we need more fiscal room,” Varga said.

The Hungarian economy could grow by 4.1 percent next year, Varga said, adding that this would allow the cabinet to “significantly” reduce the deficit while keeping an “expansionary” budget in place.

The finance ministry is committed to cutting the payroll tax rate by 2 percentage points to 17.5 percent next year, raising some child benefits and maintaining a housing subsidy programme, the minister said.

“Our goal is to reduce risks and this means significantly cutting the deficit and continuing with debt reduction,”

Varga said. “That may also mean that our economic growth rate may fluctuate.”

He said the government plans to reduce the deficit to 1.8 percent of GDP or lower from its 2.4 percent target for this year. It also intends to continue reducing the public debt level, Varga added.

A roundup of the interview can be read online HERE.

Source: MTI/Bloomberg