Friday, December 8, 2023
HomeEconomyHungary's Orban pledges economic stability as crisis looms

Hungary's Orban pledges economic stability as crisis looms

BUDAPEST (Reuters) – The Hungarian government will maintain economic stability next year and maintain a cap on household energy bills even if the European Union is in an “economic crisis”, nationalist Prime Minister Viktor Orbán said on Sunday.

As the country marks 1956 the anniversary of 1956 opposition to Soviet rule Orban, he Re-elected for a fourth consecutive term in April’s general election, he said he will face some challenges next year from a war with neighboring Ukraine.

“War in the East, economic crisis in the West,” Orban told supporters in Zalaegerszeg, about 200km (124 miles) west of Budapest, adding that “the EU is in a financial crisis and recession”.

In Budapest, teachers and students will hold a protest against the government later in the day.

“In 1956, we learned that solidarity is needed in difficult times… We will keep the economy stable, everyone has a job, we The energy bill cap scheme can be defended and households will not be alone.”

Gas and electricity caps have been a key part of Orban’s policy, but the cost of the scheme has soared this year as energy prices have soared , placing a huge burden on the national budget. The government was forced to lift the cap on high-occupancy households from 1 August.

Government will discuss 2023 budget changes in December.

The budget approved in July forecasts economic growth of 4.1% next year, while inflation is expected to be 5.2% – as a surge in inflation makes the forecast become obsolete. Prices are in double digits. Headline inflation hit 20% in September and is still rising, while growth is expected to slow to 1% next year.

Hungary, which still imports most of its gas and oil from Russia, has seen soaring energy prices widen its trade deficit and current account deficit, which the central bank said could reach nearly 8 percent of GDP this year. The forint currency fell to record lows against the euro and dollar earlier this month, forcing the central bank to raise interest rates in an emergency operation in October 14.



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