No new taxes will be introduced, but some existing ones will be abolished.

The three pillars of the new economic policy action plan adopted on Tuesday will determine the government's actions in the coming years - emphasized the Minister of National Economy at the Portfolio Budapest Economic Forum 2024 conference in Budapest on Thursday.

Márton Nagy recalled: the three pillars are ensuring affordable housing, increasing the purchasing power of incomes, and launching the Demján Sándor program to support small and medium-sized enterprises (SMEs).

The minister said that the GDP will expand below 1.5 percent this year, after market expectations are not met in the third quarter, the growth will be close to zero, but at the same time, they expect a bigger jump in the first quarter of 2025, the GDP may rise above 3 percent, and then the 3 It can move in a range of -4 percent.

Explaining the three pillars of the new economic policy action plan, the Minister of National Economy explained: in the field of housing, a realistic goal is to build at least 25,000 new apartments per year. He also called the achievement of affordable square meter prices and affordable sublet prices realistic. He emphasized that mortgage interest rates must return below 5 percent.

"Housing inflation" has run wild, and there is currently nothing to stop it, he said.

Márton Nagy touched on the fact that there is a housing crisis in Budapest. If a young person wants to rent an apartment, more than 50, even 60 percent of his salary must be paid for rent, he indicated.

According to the minister, the government should deal with housing because the local governments have not solved it. As an example, he mentioned that the regulation of short-term housing rentals (Airbnb) was in the hands of local governments in the capital, but according to him, no action was taken.

According to the government's plans, a moratorium will be announced, it will not be possible to obtain a new Airbnb license for two years, and a four- to five-fold tax increase is also planned for this activity, but this will only affect Budapest, he said.

He also explained that they wanted to ensure the right number and quality of dormitories, although this would have been the responsibility of the higher education institutions.

It is possible to increase the purchasing power of incomes in line with economic growth, emphasized Márton Nagy. The minister believes that a minimum wage of 1,000 euros and an average gross salary of one million forints can be achieved by 2028, but the wage increase can only be based on economic growth, he emphasized.

He indicated that inflation has been below expectations in the recent period, and it is necessary to keep it at a low level in order to maintain positive real wages.

The minister explained that the details of the worker's loan are being worked out, a maximum of HUF 4 million will be available interest-free.

In the framework of the Sándor Demján program, they would not increase the number of SMEs, but would like small companies to double their size based on sales revenue or balance sheet total, he said. Among other things, he mentioned as an important goal that they would double the share of domestic SMEs in total exports, increase the digital accessibility of small businesses and their borrowing opportunities.

At the same event, Finance Minister Mihály Varga spoke about the fact that the government is planning the 2025 budget with improved prospects.

Mihály Varga stated: they are not preparing to introduce new taxes. He recalled that they had already announced the elimination of three taxes, the air traffic tax, the pharmaceutical manufacturer's tax and the telecommunications extra-profit tax. I would like to continue this line, he added.

The Minister of Finance explained that the government expects a gross wage increase of 8.6 percent next year. He explained that economic growth will be helped by the 4-4.5 percent increase in retail turnover expected by 2025.

MTI
Híradó.hu

Cover photo: Márton Nagy and Minister of Finance Mihály Varga at the Portfolio Budapest Economic Forum conference
Source: Facebook/Portfolio Events