BUDAPEST (Reuters) – Hungary will cut taxes on labor and for small firms, Prime Minister Viktor Orban said on Sunday as he warned of tough times ahead for a domestic economy hobbled by stagnation in the euro zone.
Hungary’s economy expanded 4.9% last year but on Friday the government cut its forecast for 2020 from 4% to 3.5%, which would be the slowest growth rate in four years.
“I see dangerous years ahead … We need to take serious steps to defend what we have achieved so far,” Orban said in an annual state of the nation speech that reviewed his decade in office.
“We will have to focus our efforts on preserving jobs in 2020 and also perhaps in the years after… In such times, tax cuts are needed. So, we will reduce the tax on labor and on small businesses,” he added without giving details.
A nationalist who has often clashed with European Union authorities over his clampdowns on immigration, Orban has pursued a mix of go-it-alone economic policies, shifting Hungary’s debt financing towards domestic borrowing while keeping the budget deficit low.