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Finance Minister Mihály Varga said next year’s GDP growth could reach 5.5-6% at a business forum organised by the American Chamber of Commerce (AmCham) on Friday. The 2022 budget, approved by lawmakers in June, was drafted assuming a GDP growth of 5.2% next year. Varga reiterated that 2021 GDP growth is expected to reach 7-7.5%. Hungary’s economic output has returned to 2019 levels, which is an “excellent result”, considering that the tourism industry, which accounts for 8-10% of GDP, has still not fully recovered, he said.
Varga counted higher energy prices, a pickup in inflation, a worsening pandemic and a shortage of raw materials among the downside risks to the economic outlook. He said monetary policy tightening is “appropriate” in light of inflation data, but warned against making the same mistake as after the 2008-2009 crisis, when supportive monetary and fiscal policy “were rolled back too quickly”.