Hungary's economy could recover to pre-pandemic level in 2021 - Varga

Analysis

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While the European Commission forecasts that the economic performance of EU member states may return to their pre-pandemic level by the end of 2022, Hungary's Finance Ministry estimates that the Hungarian economy can reach the pre-pandemic level this year, Finance Minister Mihály Varga said on Tuesday following an Ecofin meeting.

Varga recalled that the EC in its summer economic forecast raised its GDP growth estimate for Hungary to 6.3% this year, from a 5% forecast in the spring. For the European Union as a whole, the EC forecasts 4.8% GDP growth this year. In 2022, the EC thinks it is likely that GDP will rise by 5% in Hungary and by 4.5% in the EU as a whole, he added.

The minister said he and his colleagues were briefed on Tuesday on the results of the meeting of G20 finance ministers and central bank heads. Varga said the Two-Pillar Solution of the OECD regarding the introduction of a global minimum corporate tax rate is still far from acceptable for Hungary and "we continue to reject any international solution that restricts fair tax competition."

Regarding Hungary's Recovery and Resilience Fund (RRF) plan submitted for evaluation to the European Commission, the minister said that consultations are taking place between the Hungarian authorities and the EU authorities. 

The country's financing is secure, the Hungarian economy is functioning, and the late acceptance of its recovery plan by the EU does not endanger the implementation of Hungarian programs, Varga said.

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