February 14th, 2017

European Commission: Hungary awaits rapid growth

Hungary is growing at a “feistier rate” than its European peers and its employment rate has jumped, the economy minister said, commenting on a new EC forecast. The European Commission reckons Hungary’s economic growth rate this year will quicken to 3.5% compared with its previous forecast of 2.6 The wage deal struck at the end of 2016 had been factored in to the commission’s new projection, the economy ministry said.

The government targets a rate of economic expansion of 4.1% this year and 4.3% in 2018. The ministry said that major tax cuts and wage rises may end up boosting real wages by 40% over the next six years. The gap between Hungarian wages and the European average will begin to narrow while the reduction in tax burdens on businesses will bring Hungary to the same level as its regional competitors, it said. It is clear that Hungary’s low tax rate is proving to be a real factor when it comes to companies deciding whether to make investments. Besides stimulating the economy, the low tax rate also helps to whiten the economy, it added. The commission reckons that Hungary’s growth rate will be 3.2% in 2018, well above the European average.

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  • FUCeausescu

    More proof that Orban is destroying Hungary. Report also mentioned the decline in debt/GDP, which is forecast to decline to 71% by end of 2018, which is a significant improvement compared with 83% in 2010. Not to mention that the FX percentage of that debt has been cut in half, making Hungary far less vulnerable. A decent pace of growth, while actually fixing the twin debt bubble the Socialists plunged Hungary is a sure sign that Hungary is close to collapse. Wage and employment growth is also improving the lives of most Hungarian households in the past few years, helping reverse the effects of the 2008 crisis which Hungary entered as the first country that needed IMF money in the EU. Yep! Hungary is going down the drain!

    • Yes, then Hungary under Fidesz is sooo unique in Europe.
      If we analyse the report, which is about ALL the 28 member states and not just Hungary…
      “All EU Member States’ economies set to grow in 2016, 2017 and 2018
      Having proven resilient to global challenges last year, the European economic recovery is expected to continue this year and next: for the first time in almost a decade, the economies of all EU Member States are expected to grow throughout the entire forecasting period (2016, 2017 and 2018).”
      That is just a starting fact.

      If we compare GDP growth for 2016, Fidesz’ Hungary comes bottom compared with Poland, Czech and Slovak Republics, Romania and even Bulgaria.

      If we look at Debt/GDP-ratio Fidesz Hungary is sometimes double the value the other East-European countries have and this will grow when Fidesz finally starts to take down the 10 BEUR Russian PAKS2-credit line. It is estimated that PAKS2-debts will alone increase the Debt/GDP-figure 1%-unit every year for many, many years to come.

      So, if the Debt/GDP-ratio is so catastrophical – Why must Fidesz make it worse (and de facto breaking their own Constitution), when Fidesz has a problem lowering the Debt/GDP-ration with a mere 1%-unit each year (which more depends on the GDP getting bigger, than debt getting smaller…)?

      And, with Fidesz stealing the 2nd Pillar in the Hungarian Pension system 2011, that started to build up in 1998 (remember Fidesz ruled 98-02?), Fidesz has created a huge backlog for future Governments, together with the PAKS2-svindel and the possible totally disastrous Budapest2024-olympics.

      As all figures looks OK at the moment for all 28 EU member states, the European Commission also have warned for extreme volatility in the near future with Idiot in Chief to the left and Putin to the right and just a mess in the South…meaning Hungary, with its rather low expectations, compared to its regional rivals, can experience a 2008 situation rather fast.

      • FUCeausescu

        “If we look at Debt/GDP-ratio Fidesz Hungary is sometimes double the value the other East-European countries”

        This is 100% a consequence of the previous government, while as I pointed out current government is slowly making progress on fixing it.

        “If we compare GDP growth for 2016, Fidesz’ Hungary comes bottom compared with Poland, Czech and Slovak Republics, Romania and even Bulgaria.”

        Since 2013 Hungary’s average growth rate has been in step with the average of regional peers, which is an achievement given the sorry state it was left in by the previous government. EC forecasts growth will be above regional average for this year and next.

        You can pick at it, twist it, turn it, mix it, but bottom line is that Hungary has reversed the disastrous path that your Socialists have put Hungary on. Still a lot of work to do, but at least it is on the right path.

        BTW, Nuclear power will be very important to Hungary’s energy security given the obstruction of South Stream in 2014. We now know why it was obstructed, given Nord Stream 2 which it seems is being built. We argued then that this will endanger Hungary’s energy security. It turns out I was right, because after 2019 when Nord Stream 2 is projected to be finished Hungary’s gas supplies through Ukraine will no longer be secure. All thanks to an EU initiative you and all the Soros minions on this site supported. Goes to show what you really want for Hungary and its future well-being.

        • “This is 100% a consequence of the previous government”

          Of course Gyurcsany did it – for the next 20 years, but Fidesz just improves things by stealing the 2nd Pillar of the Pension System in 2011, that was built up from 1998 and was planned to be ready 2013 and orders PAKS2 without have a proper assessment of effects and prices.
          But whatever protects Fidesz is Good, screw the next generation of Hungarians…

          “Since 2013 Hungary’s average growth rate has been in step with the average of regional peers”

          Average on average…yes, yes, stats and lies.
          Facts is that Fidesz’ Hungary tanked in 2016 and that is a fact, but I know you will invent some average to prove reality just does not exists. That is called “Alternative Facts” nowadays.

          “Nuclear power will be very important to Hungary’s energy security given the obstruction of South Stream in 2014”

          That is a very brave statement given that gas is used to heat and cook, and electricity in small part is used to heat Hungarian homes, but hey in Fidesz Communism we all get a free cheque to heat up our house with nuclear power.
          So what will the price be per kWh?

          You know Fidesz never ever did a proper calculation of that and given the fast development of renewables nowadays, when China finally figured out that it is better to use renewables than shorting people’s lifespan dramatically by poising the air, water and earth en masse.
          If not already happened, 2017 is the year when solar power will be the cheapest way to produce electricity, which is way before earlier expectations, but something happened in China.

          So back to my old mantra – Hungary should spend those 10 BEUR that PAKS2 is supposed to cost, to build up thermal heating plants utilizing Hungary’s unique possibilities, including new distribution network for heat, plus huge solar farms and a new distributed national power grid that would avoid the major flaws with the extremely centralised power grid Fidesz needs to build up for PAKS2.

          PAKS1 should be renovated so it can work 10-20 years more, which will allow for a smooth transition of the rather small increase of electricity needed that real experts expect. Not the inflated numbers Fidesz use.

          Import of gas and oil will be reduced for heating, the thermal plants may use gas during cold-spells to lift the distributed temperature and much of the gas network may be taken out of operation. Cooking is possible on electricity, but it will not push up the usage that much.

          All this will lead to many new jobs in Hungary, but not only in construction which is one-off, but in operation and maintenance, which is much more important.
          And the jobs will be local out in different parts in Hungary, not only concentrated to the village of Paks.
          Also you will not a university exam to work with most of renewable plants and distribution network, but you need that to work with PAKS Nuclear Power Stations, so more Hungarians from the countryside will get work.

          But Fidesz’ pockets will not be lined up with the kick-backs from the PAKS2-project and that makes you sad and afraid.

          • FUCeausescu

            “Alternative Facts”
            “Fake News”

            The newest talking points coming from an establishment that keeps losing credibility. Ironic, given that it was fake news and omission of news that eroded their credibility to begin with. Remember the highly educated migrants stories of 2015? Remember the pictures of women & children, while the overwhelming majority were young men? Do you remember the German police claiming that on a night when 1,200 women were assaulted in a number of German towns, they claimed it was relatively calm, and the MSM failed to report on what happened for five days? Alternative facts indeed!

            But “stats and lies”??? Really?

            Fact is that even with the 2016 slowdown in growth, Hungary did indeed have comparable growth to its regional peers, and it has been growing at twice the rate of the EU overall for the past four years on average. I know that last year’s slowdown gave you some reason to cheer, but even the EC tells us that the Hungarophobic party will not last beyond 2016.

          • “Fact is that even with the 2016 slowdown in growth, Hungary did indeed have comparable growth to its regional peers”

            Of course, like GDP Growth % (year on year) 2016:
            Romania – 4.9%
            Bulgaria – 3.3%
            Slovakia – 3.3%
            Poland – 2.8%
            Czechia – 2.4%
            Hungary – 1.9%

            Sorry for not understanding that having “comparable growth” means coming last…

          • FUCeausescu

            I was talking about the average of the past four years, you are pathetic to say the least! If we go to 2014 for instance, Hungary was among the top, which is why taking a multi-year average provides a clearer picture. A picture you do not like, just like you do not like the EC forecast for this year and next.

          • You wrote what you wrote discussing the 2016 performance.
            I have earlier in this thread debunked your average on average that will just prove anything and nothing. No need to repeat myself.

          • FUCeausescu

            With all due respect what did you debunk? How do facts prove anything and nothing? please elaborate in this particular case. Simply stating that it proves “anything and nothing” is not enough. Mr. Viking does not get to issue unquestionable decrees

            I said that Hungary’s growth rate since the 2013 EU recovery started has been in line with regional peers. It averaged 2.6% in the 2013-2016 period. Adding up the average of all former communist EU members for the exact same period, you get 2.2%. Incidentally , only three out of the ten peers registered a growth rate that was higher. How does any of this prove “nothing”? Please look at the data yourself and find a single factual flaw with what I am saying, Or please make your point in regards to your belief that these facts are meaningless as you are trying to claim, other than the fact that you find these facts to be inconvenient, of course.

            BTW, I took the data from Statista if you are interested to compare facts with your bull.

            BTW2: I see some more Soros minions came out of the woodwork and they gave you thumbs up, regardless of how idiotic your comment. I guess nothing changed.

          • My data is from the horse’s mouth – the European Commission, who gets its data from Eurostat, to which every member state reports according to, nowadays, strict rules. That you call “bull” and refuse to produce a link. I on the other hand have two times posted my link in this thread.

            Why is an average 2013-16 interesting for you and not the outcome of last year?
            Because you can spin your point, sitting in Canada (or you are visting the US now?), that life in Fidesz’ Hungary is just wonderful – obviously too wonderful for you to join us living here, knowing the actual reality.
            And the reality was last year – not an average compared with other countries’ averages during several years.
            If I would look I probably would find a few years Gyurcsany ran the most successful economy compared to some unknown ‘regional peers’…proving what?

          • FUCeausescu

            Why is one year more interesting to you than a four year average? Is it because it happens to be Hungary’s weakest in four years, so it allows you to spin it, pretend that it represents the overall performance of Hungary’s policies? Not to mention that this article is about the EC forecasting a good year for Hungary, as well as a decent performance next year. So, in two years time, if the EC is proven correct, will you still talk about 2016? or should we talk about Hungary’s overall performance during this recovery, in other words 2013-2018? Your logic is plainly idiotic.

            I’d say four years is a much better representation of Hungary’s overall economic performance than any one particular year. If not, then why not pick 2014? Why 2016?

            And your Gyurcsy example is equally idiotic, because you are the one wanting to focus on one particular year, while I am the one suggesting we should look at the overall performance during this recovery. So I am not the one picking out just one data point in order to pretend that it represents the overall situation, you are the one doing that.

          • Why 2016?

            Because 2016 just happened and we live now.
            The future is all good, but it is just that – a reasoned opinion, but not a fact.
            2017 we discuss one year later, but the fact remains for 2016 – Fidesz’ Hungary took the jumbo place in the region. No spin may change that, average or not.

          • FUCeausescu

            Thing is that if you would have said “hey look at that, one of the strongest-growing economies in the EU”, when the 2014 numbers came out, then you would also have the credibility to point to 2016 and make your point about failure. But you surely did not, therefore no credibility to dismiss the average in favor of one data point.

            What you are doing right now is the equivalent of going bowling and proclaiming that you are a master bowler, just because your last ball was a strike. Never mind that the one before was a gutter ball, or that your total score came in at 100, out of a maximum potential of 300, the important part is that the last ball you threw was a strike, therefore you are the master. Sad and pathetic, as always!

          • CG Walkman

            Even if you looked at the 4 year average, the major part of that growth was primarily driven by EU funds and the export oriented auto-manufacturers Which Fidesz policies helped them? I know logic or cause and effect is not your strong suit, but we’ve been waiting for 2 years for you to post this answer.

          • FUCeausescu

            You are forgetting one important aspect here, namely that what you just wrote in regards to Hungary, is also pretty much true of all the peers I compared with in regards to EU funds available and foreign companies.

            Another factor you are leaving out is the fact that Hungary’s economy is not only dependent on exports and EU funds. It is also agriculture, domestic consumer demand, local startups and so on. To give you an example of policies that really helped in my view, the FX conversion really helped with freeing up consumer demand, as did Hungary’s fiscal discipline which helped a great deal with keeping interest rates low. Also Hungary has been a haven for startups regionally.


            Even the fact that it managed to absorb funds available through EU budget is an achievement. Many governments in the region failed to take full advantage. As is the continued facilitation of new investments from abroad.

            I know all the Soros minions on this site hate the fact that Hungary is recovering from the nightmare the previous government left it in, but seriously, this is becoming ridiculous at this point.

          • Also Hungary has been a haven for startups regionally.

            You MUST be joking…
            “Terms of Service
            We run a web site hosting service called StartupRanking.com and would love for you to use it. Our service is free and is designed to give you as much control and ownership over what goes on your site as possible and encourage you to express yourself freely”

            You use a total un-scientific source to make claim…you are a clown.
            But pls put it in your CV – it will be apreciated when you apply for that job in the Drumpf administration. You clowns deserve each other!

          • CG Walkman

            You still haven’t answered my question.

            I said the auto sector (and in particular Mercedes) contributed a great deal to the increased GDP. It’s quite easy to increase consumption by making someone else take over your responsibilities and private debts. Also spending hard earned saving to reduce govt debt. Unfortunately, no one wants to take over my debt, and my govt is making any organization take over that.

            Haven for start-ups. Really? What are these start-ups – company registrations? Well, in that case, put me down for 2. Maybe 3, come Sep.

            Many of the investments latest investments are more due to the location of Hungary and the logistics infrastructure, and NOT due to government policies – unless you’re talking about “in-crowd” buying land cheaply from the government and selling it at a profit to the foreign investor. The “so-called nightmare” wasn’t really that bad. Most of the foreign companies in Hungary were doing quite well at the time because they had their own funds. The Narnian company I was associated with, had its highest sales ever starting in 2008, and that has been growing since. Oh yeah, it had been here for a long while before that.

          • No, that is your tactic – to use whatever piece that can be spun into something pro-Fidesz and then repeat it over and over again.

            My approach is more – Zlatan had a bad day, will it be repeated and he is on a bad streak?
            2016 was a bad year for Fidesz’ Hungary – will it be repeated?
            You have no opinion, because you keep on with your average on average mantra…

            And this before Fidesz has started to draw the debt for PAKS2 or won the Budapest2024 Olympic Games.

    • CG Walkman

      Hungary’s Debt/GDP in 2010 was 80%. The lowered govt debt was achieved by nationalizing private wealth.
      No, Hungary is not going down the drain. It’s just flowing with the tide until it is time to start repaying the Russian debt and supporting pensioners who have little or no savings.

  • anti-communist

    Of this whole piece only this part actually comes from the EC:

    The European Commission reckons Hungary’s economic growth rate this year will quicken to 3.5% compared with its previous forecast of 2.6.

    The rest is Fidesz talk.

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