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Hungary's economy to return to early 2019 levels in first half of 2022 - minister

·1-min read

BUDAPEST (Reuters) - Hungary's economy could return to its early 2019 levels in the first half of 2022, with the recovery from the coronavirus-induced slowdown slower than previously expected, Finance Minister Mihaly Varga told a conference on Thursday.

Hungary's weakened economic prospects could represent the biggest threat to Prime Minister Viktor Orban's decade-long rule as he prepares to face parliamentary elections in the first half of 2022. Orban's ruling Fidesz party currently leads opinion polls.

Orban's three-month furlough programme expired in August and there are no indications yet that his government will resurrect it, with the budget projected to run a deficit worth 7% to 9% of economic output.

Varga said a vaccine in the second quarter of next year could help the recovery in the global economy and the domestic economy gather speed.

"The real turning point could come in May-June 2021," Varga told an online business conference of website Portfolio.hu.

He also said part-time employment has increased in the past few months as companies tried to cope with the downturn. He said wage rises were expected to moderate in coming months.

Varga said the government would announce more measures to help the recovery in the coming weeks.

Hungary will reintroduce a lower value-added tax rate of 5% on housing projects until the end of 2022 to boost construction, Orban said late on Wednesday. nL8N2GY5N6

Orban also said his administration did not plan any further virus restrictions in the next three weeks despite a surge in infections since late August.

(Reporting by Krisztina Than, editing by Larry King)