The government’s economic policy resting on pay rises and tax reductions, too, plays a key role in the fact that in the first half of this year wages increased by 10.6 per cent.

Finance Minister Mihály Varga highlighted, evaluating the latest statistical data, that wages and retail consumption rising continuously, parallel with the expansion of employment, have made a meaningful contribution to the growth of the Hungarian economy’s performance above five per cent, and as a result, Hungary has jumped to the top of the rankings.

Since 2010, net wages have increased by 85 per cent, while real wages have been on the increase for more than six years, the Finance Minister pointed out, highlighting that, based on international comparisons, between 2010 and 2018, Hungarian pre-tax wages converted into EUR increased at the fastest rate in the Visegrád countries. He said in consequence of tax benefits and tax reductions, the financial situation of families is improving continuously, and this – through retail consumption – also has an impact on the development of the gross domestic product.

As a result, in the second quarter of 2019, according to data adjusted seasonally and for calendar effects, Hungary’s economic growth rate was 5.2 per cent, which is 0.1 percentage point higher than forecast in preliminary estimates and 1.1 percentage points higher than recorded in the previous quarter, Mr Varga said. This growth rate, which is four-fold the average of EU Member States, has propelled Hungary to the number one spot in the EU rankings.

The Minister stressed that, in addition to consumption boosted by an employment rate above 70 per cent and double-digit pay rises, a dynamic increase in investments, industry, the construction industry and the services sector have contributed significantly to the outstanding growth rate. A combination of government measures adopted to date – in particular, the six-year wage agreement, the already launched elements of the competitiveness programme, the measures seeking to promote the housing situation of Hungarian families, and the investment-friendly economic environment – has contributed to the economy’s expansion by 1.6 percentage points.

Since 2010, Hungary’s GDP has increased by 30 per cent in total, but as regards the future, it is necessary to equally pay attention to the uncertainties of the world economy and to the challenges the EU’s environment is facing. However, the Economy Protection Action Plan will create the conditions which will enable Hungary’s growth to continue to remain minimum two percentage points above the EU average, Mr Varga pointed out.

(Ministry of Finance)