Hungarian government is drafting plans that could become elements of a program to protect the economy from the impact of a global economic downturn, Mihály Varga, hungarian minister of finance said on Kossuth Rádió Sunday, according to a report by MTI.
The safeguard program could be in place by the spring.
The impetus of the global economy has started weakening somewhat, and one cannot rule out that Hungary may be affected, which is why preparations should be made, he added.
The government wants to take measures that will keep jobs and continue the scale of wage growth, Varga said. It will also strive to maintain the pace of developments and consumption, while preserving the purchasing power of wages and pensions, he added.
Varga noted that household consumption and investment growth are engines of economic growth in Hungary.
Hungaryʼs government plans 3-4 measures in the coming months that will create more job opportunities for everybody, he said.
The European Commission (EC) confirmed its projection for Hungaryʼs GDP growth this year at 3.4% in a quarterly forecast.
In a country note, the EC acknowledged that Hungaryʼs GDP growth had accelerated to almost 5% in 2018, but said the domestic cycle „has reached its peak.”
Investment growth is forecast „to stabilize at a high level” relative to GDP in the coming years as the absorption of EU funds peaks and a temporary VAT reduction on home construction expires.
The EC sees consumption growth „moderating” as the economy absorbs its labor reserves and employment and income growth slow.
The EC added that strong demand and labor cost growth is fueling core inflation, but subdued oil prices are expected to keep headline inflation near 3% in 2019 and 2020.