News & Analysis

Hungary’s convergence report shows optimistic mid-term outlook

Hungarian finance minister Mihály Varga has said that the country’s economy will grow by at least by four per cent in the coming years, with Hungary’s public debt gradually falling until 2023.

Presenting Hungary’s updated convergence report for the European Commission, the country’s finance ministry projects annual GDP growth to total in four per cent in 2020 and 2021, 4.2 per cent in 2022 and four per cent in 2023, supported by the public debt gradually decreasing to 55.9 per cent of GDP and the budget deficit staying well under three per cent until 2023.

“The aim of the government is to keep the growth rate two per cent above the EU’s average since only this can provide the country with a real chance for convergence,” Mr Varga said, adding that the ministry’s competitiveness programme will add 0.7 per cent to annual growth in the next period.

The report forecasts that inflation will average in 2.7 per cent in 2019, 2.8 per cent in 2020 before reaching the Hungarian central bank’s target of three per cent between 2021 and 2023.

Speaking to the Hungarian press, minister Varga said that adoption of the euro is currently not on the government’s agenda. “The government has no intention of joining a currency zone that is even now going through a transformation,” he said, however, that Hungary’s macroeconomic conditions would be suitable for a future euro bid.

“In the coming years we have to improve the indicators of the Hungarian economy, properly meet the [Maastricht] criteria and the question of when we want join has to be looked through the economic situation,” the minister concluded.