The next four years are expected to see strong growth coupled with a gradual reduction in public debt and budget deficit levels, according to Hungary’s convergence program sent to the European Commission.
The Ministry of Finance expects economic growth of 4.3% this year, combined with a budget deficit of 4.9% of GDP and a level of public debt of 76.1%.
Hungarian economic policy over the past year has focused on controlling the epidemic and reviving the economy, the ministry said in a statement on Friday.
Top priorities were protecting jobs, supporting families and businesses and promoting investment, he said.
As a result, last year the economy grew by 7.1%, well above the 2021 convergence program growth forecast of 4.3%, the statement said, adding that this figure was equivalent to the seventh level the highest growth rate in the European Union.
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The new program aims to boost competitiveness, create balanced and sustainable economic growth and reduce the gap with average European development levels. A strong labor market and healthy consumption, along with a high investment rate and new capacity, will serve as the backbone for these goals, the ministry said.
Growth is targeted at 4.3% this year and 4.1% in 2023, while the next four years it is expected to exceed 4% each year.
By 2026, the deficit is expected to fall to 1% of GDP, while public debt is expected to fall to 63.1% of GDP.
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The forecast is weighed by risks such as a possible resurgence of the coronavirus and a protracted war in Ukraine, he added.
Inflation is expected to average 8.9% this year before falling significantly in 2023, according to the convergence report. The government continues to aim to protect families from rising prices by capping utility costs and fuel prices while limiting interest on household loans and food prices, the statement said.