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ECONOMY SET TO GROW OVER 6% ‘WITH OR WITHOUT EU FUNDING’

 

Hungary’s GDP growth could exceed 6% this year “even if not a single cent is received” from the European Union until the end of the year, Finance Minister Mihály Varga said in an interview published by news portal Origo. Citing recent calculations, Varga said economic growth could be 5.3% next year, and “the economy could make up for the losses suffered during the coronavirus pandemic in 18 months.” Brussels would be unable to hold back the Hungarian economy “even if it wanted to”, he added. Responding to a question regarding snags in the approval process for Hungary’s post-pandemic recovery plan because of concerns in Brussels over rule-of-law and oversight shortfalls, Varga said the EU was “trying to turn a purely economic issue into a political one”, adding that hopefully a “reasonable” solution could be found. “We are constructive and cooperative, but I must point out that Brussels’s shameful attitude will have no bearing on the Hungarian economy’s situation,” Varga said.
Concerning inflation, Varga said that economies were gearing up again across the world with often limited supplies, leading to a shortage of certain materials and goods, driving prices up. Goods are not becoming more expensive “because of VAT or the government”, the minister said. According to the finance ministry, inflation is likely to be 4.2% this year and 3.6% in 2022. Meanwhile, Varga said that the government was mulling another pension hike in November, for the second time this year, taking into account higher-than-expected inflation. He added that a pension bonus of a combined 50 billion forints would be paid to seniors before the end of the year, while one million families would be refunded the personal income tax they paid in 2021.
Concerning proposals to introduce a global minimum tax, Varga said: “Hungary refuses to support any tax hikes, especially ones that would negatively impact the competitiveness of not only the country but the foreign companies here.” He noted that a uniform corporate tax rate of 15% had been proposed while it is currently 9% in Hungary. “We must promote the Hungarian interest even if in doing so we defy a proposal by the president of the United States,” he said.