July 27, 2019 / 9:10 AM / 21 days ago

Hungary PM Orban flags more economic stimulus plans for 2020

FILE PHOTO: Hungarian Prime Minister Viktor Orban arrives to take part in a European Union leaders summit, in Brussels, Belgium July 2, 2019. Geoffroy Van Der Hasselt/Pool via REUTERS

BUDAPEST (Reuters) - Hungary expects to have to introduce two more economic stimulus programs next year as growth slows in the European Union, its main trading partner, Prime Minister Viktor Orban said on Saturday.

Orban’s economic policy has focused on maintaining an economic growth rate exceeding the EU average by 2 percentage points. In June, the government announced a first batch of measures, including tax cuts, to boost job creation.

Hungary’s economy expanded by 5.3% in the first quarter, a 15-year-high, and Finance Minister Mihaly Varga has said the June measures could sustain growth at around 4% next year.

However, with the European outlook deteriorating, Orban said further steps could be needed to sustain fast economic growth.

“If our expectations for the prospects of the European economy are proved correct, in the spring of 2020 we will need a second and in the autumn of 2020 a third action plan to protect the economy,” Orban said in his annual policy speech in the Romanian town of Baile Tusnad.

He did not elaborate on the details of the measures, but said the programs would have to improve Hungary’s competitiveness.

On Thursday, European Central Bank President Mario Draghi all but pledged to ease monetary policy further as the economic growth outlook in the euro zone, which accounts for the brunt of Hungary’s foreign trade, deteriorates.

Economists expect Hungary’s economic growth to slow to 3.3% next year from the 4.3% forecast for 2019.

Reporting by Gergely Szakacs; Editing by Mark Potter

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