Hungarian government announces new 21-point action plan
The government will start work on the New Economic Policy Action Plan, based on the following three pillars:
- increasing the purchasing power of incomes;
- ensuring affordable housing;
- and the Demján Sándor Programme, which aims to double the size of businesses.
The New Economic Policy Action Plan contains a total of 21 measures along these three pillars, the ministry added.
Minister Gergely Gulyás, the Prime Minister's chief of staff, has announced at a press conference earlier today that the aim is to ensure that growth affects the widest possible range of society. This includes families and SMEs.
The cost of the economic programme could be in the order of hundreds of billions of forints, according to Gergely Gulyás. If we go by this very rough estimate, the budgetary burden of the programme as a share of GDP could be a few tenths of a percentage point.
According to the ministry, the government will support the increase in purchasing power of incomes through three measures:
1. conclusion of a three-year wage agreement with employee and employer representatives,
2. launch of a Workers' Credit Programme,
3. doubling the family tax credit for children (in two steps).
To alleviate the housing problem in Budapest, the government is to work out three measures:
4. tighter conditions for the provision of private accommodation services, i.e. Airbnb,
5. examining the system of rents and contractual conditions,
6. more places in dormitories for higher education students.
The government aims to improve housing conditions across the country, beyond Budapest, and plans to take seven further steps on affordable housing:
7. developing a housing programme for young people,
8. launching the Rural Home Renovation Programme,
9. the temporary possibility of 50% of the benefits received on the Széchenyi Rest Card to be used for home renovation,
10. the optional, voluntary, temporary use of voluntary pension savings for housing purposes,
11. the development of a tax deduction for housing allowances provided by the employer
12. maintaining the reduced VAT rate of 5% on the sale of new residential property until the end of 2026,
13. introducing a voluntary 5% interest rate cap on housing loans, in cooperation with the banking sector.
The government announces the Demján Sándor Programme, which aims to double the size of domestic businesses. The SME sector is the backbone of the Hungarian economy, which the government is helping to support and further strengthen through eight measures:
14. capital financing programme of a significant size,
15. "1+1 SME Investment Stimulus Support Programme",
16. "Every business should have its own website" programme to promote digitalisation,
17. For the Széchenyi Card Programme's investment-type loan products, the annual interest rate to be paid will be significantly reduced to 3.5%,
18. Re-launch of the export promotion loan programme of Eximbank Zrt,
19. the announcement of the investment loan programme to be provided by Eximbank Zrt. and the investment capital programme to be carried out by National Capital Holding,
20. accelerate EU programmes for the domestic SME sector,
21. reducing the administrative burden on the SME sector, thus easing the conditions for the application of the statutory audit threshold.
According to the ministry, the 21 measures of the New Economic Policy Action Plan will contribute to achieving economic growth of between 3 and 6%.
Cover photo: MTI Photo/Róbert Hegedüs
