BUDAPEST: From 2013 onward economic growth in Hungary has outstripped the average rate in the European Union and this is expected to remain the case this year and next, creating the conditions for tax cuts and higher spending, an economy ministry official said on Wednesday.
Péter Benő Banai, deputy state secretary for budgetary affairs, said all this was possible in parallel with continued budget stability, which means a deficit of 2.4 percent of GDP next year and further public debt reductions. The government expects wage rises in lower income categories to lead to faster wage growth in respect of higher ones, with a knock-on positive impact on consumption, he said. The rate of investments is expected to grow and this can already be seen in the house building market. The uptake of EU financing will reach an even higher level next year, he added. Given that Europe’s economy is likely to take off next year, demand for Hungarian products will rise on the export market, Banai said. If it turns out that economic growth fails to reach the 4.3 percent target in 2018, then there are sufficient reserves built into the budget to accommodate any income shortfalls, the official said.
