Márton Nagy: slower growth, rescheduled investments and cautious residential consumption are expected

By: Trademagazin Date: 2024. 08. 21. 12:56

In an interview with Index, Minister of National Economy Márton Nagy spoke about the future of the Hungarian economy, the rescheduling of state investments, and the development of household consumption and savings. The minister forecast economic growth of 2% for the year 2024, which is significantly lower than the previously expected 4% expansion. According to him, economic recovery will be gradual, and in the midst of significant challenges, the focus should be on long-term recovery.

According to Márton Nagy, the reason behind the slower growth of the economy is the prudence preventing consumption, the neighboring war, and the general situation of budgetary and monetary policy. The minister indicated that further postponement of state investments over HUF one billion is expected, which could be postponed to 2026-2027 instead of 2025. This step serves to maintain budget liquidity, which the minister characterized as “cash flow optimization”.

In the interview, the minister considered the elimination of extra-profit taxes justified in the pharmaceutical industry, aviation and telecommunications sectors, since, according to him, extra-profits are no longer present in these sectors. Regarding the minimum wage, Márton Nagy said that it should be gradually raised to 50% of the average wage by 2027, in several steps.

According to Márton Nagy, there is a strong sense of caution among the Hungarian population, which instead of consumption is channeled into savings and home equity growth. The minister emphasized that for the population, housing issues are more important than restoring consumption. In the interview, it was said that the number of housing transactions increased by more than 40% in the first half of the year, and the value of new housing loan contracts also increased significantly.