Hungary PM Orban flags more economic stimulus plans for 2020

Hungary PM Orban flags more economic stimulus plans for 2020
FILE PHOTO: Hungarian Prime Minister, Victor Orban arrives at an European Union leaders summit in Brussels, Belgium October 17, 2018. Aris Oikonomou/File Photo   -  Copyright  POOL New(Reuters)
By Reuters

BUDAPEST (Reuters) – Hungary expects to have to introduce two more economic stimulus programmes next year as growth slows in the European Union, its main trading partner, Prime Minister Viktor Orban said on Saturday.

Orban’s economic policy has focussed on maintaining an economic growth rate exceeding the EU average by 2 percentage points. In June, the government announced a first batch of measures, including tax cuts, to boost job creation.

Hungary’s economy expanded by 5.3% in the first quarter, a 15-year-high, and Finance Minister Mihaly Varga has said the June measures could sustain growth at around 4% next year.

However, with the European outlook deteriorating, Orban said further steps could be needed to sustain fast economic growth.

“If our expectations for the prospects of the European economy are proved correct, in the spring of 2020 we will need a second and in the autumn of 2020 a third action plan to protect the economy,” Orban said in his annual policy speech in the Romanian town of Baile Tusnad.

He did not elaborate on the details of the measures, but said the programmes would have to improve Hungary’s competitiveness.

On Thursday, European Central Bank President Mario Draghi all but pledged to ease monetary policy further as the economic growth outlook in the euro zone, which accounts for the brunt of Hungary’s foreign trade, deteriorates.

Economists expect Hungary’s economic growth to slow to 3.3% next year from the 4.3% forecast for 2019.

(Reporting by Gergely Szakacs; Editing by Mark Potter)

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