Márton Nagy: in the long term, we must return to investment-led economic growth

He explained that 2025 has so far shown a mixed picture of the economy, with the first-quarter GDP yielding weaker results than expected. According to the minister, this can be attributed, among other things, to weak external demand, which is adversely affecting Hungarian exports and domestic industry, while domestic demand is strong and consumption is growing, which is fundamentally pulling GDP up.

Márton Nagy stated that consumption-led economic growth is not sustainable in the long term. He said that the economy cannot be based on consumption-based economic growth for several years, and that in the long term, we must return to investment-led economic growth.

The minister indicated that both elements – both short-term consumption incentives and long-term investment incentives – are present in the government’s economic policy.

With regard to consumption, special attention is being paid to the labor market, which is currently stable, full employment is available, and wages are rising – he explained. He noted that last year was a peak year for lending in the banking sector, and the credit dynamics were further enhanced by workers’ loans in the first quarter of this year.

Fiscal transfers will now really stimulate consumption – said Márton Nagy. He highlighted:

In addition to workers’ loans, large tax cuts, including transfers to families and pensioners, will now be included in the economy. He mentioned as examples the increase in the family tax allowance, the personal income tax exemption for mothers raising children, the VAT refund for pensioners, the inflation compensation of pensions, the tax exemption of the Gyes-Gyed, the payment of gun money, the 13th month pension.

These represent an outflow of money into the economy in the hundreds of billions of kronor, said the Minister of National Economy.