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Since April this year (that is, since the first expenses), the Portfolio has monitored and uniquely managed the expenses incurred (and published in newsletters) at the expense of the Economic Protection Fund. Thus, it turned out that together with the expenditures on December 24, it had already spent almost HUF 4 billion on this fund, which is almost 9% of the expected GDP this year.
In their report on Saturday night, RTL Klub Híradója reported on the Portfolio article, noting that the government spent HUF 4 billion in just 8 months, but reallocated most of it at the end of the year, almost HUF 1 billion in the last week.
The channel contacted the Ministry of Finance on the matter, who responded that “companies and investments create and preserve jobs, so their support is essential not only to protect companies but also jobs. “.
Together, these goals are met by the Economic Protection Action Plan, for which the government is mobilizing an unprecedented amount of money, amounting to around 28% of GDP.
added the wallet.
The size of the rescue package of 28% of GDP mentioned by the Ministry of Finance is new information. Initially, when the first wave of the epidemic broke out and new funds were established, the government hoped that the rescue package against the negative economic effects of the coronavirus epidemic could reach 20% of GDP, speaking of a series of measures worthwhile. of HUF 9.2 billion. It has been and continues to be made up of three components: the Epidemic Fund (1), the Economic Fund (2) and extra-budgetary financial measures, which include credit facilities and credit incentives (3). The epidemic control fund was originally HUF 633 billion, but the amount of expenditures made with it is already HUF 1.014 billion. The original budget for the economic protection fund was HUF 923 billion, but as we reported, the fund’s expenditures were already HUF 3,977 billion and the third element of the package of measures amounts to HUF 7-8 billion.
In other words, the increase in the first two items exceeds HUF 3.4 billion, which represents 7.4% of the estimated GDP for 2020. With this increase in the size of the rescue package and the size of the original rescue package At 20% of GDP, the gigantic size of the 28% of GDP rescue package mentioned by the ministry may come to light.
But what is this fund?
Memorable, the government created the Economic Protection Fund as the main instrument of the crisis caused by the coronavirus epidemic when it modified the 2020 budget.
The government, as the name implies, originally established a shield against the negative economic effects of the epidemic, but implemented a wide range of expenditures, in many cases individual state investments (for example, sports facility developments), individual subsidies in Hungary and abroad, he “took advantage” of the fund to recapitalize companies.
More recently, MNB analysts grouped together the areas where the government spent the most from the fund at the beginning of December (the items listed below amount to HUF 1,351 billion, which is 45% of the total spending of 2,989 thousand million HUF at the time, which shows how fragmented this series of expenses was at the expense of the fund).
| Main expenses of the Economic Protection Fund | |
| Expense item | Mrd ft |
| Helps competitiveness | 269 |
| Appropriation of tourism development objectives | 158 |
| NRDP property | 125 |
| Cross-border economic development programs | 90 |
| Increase the competitiveness of healthcare companies | 85 |
| Investment in the Budapest Belgrade railway line | 82 |
| Trust support | 80 |
| Investment grants for large companies | 80 |
| External economic development objective | 74 |
| Public service compensation | 64 |
| Compensation for public passenger transport services | 62 |
| Development of the Hungarian Armed Forces | 61 |
| Purchase of MNV shares | 42 |
| Support for the Hungarian village sub-programs | 40 |
| Priority investments in sports facilities | 39 |
| Source: MNB Collection, December 2020 | |
Cover photo: Minister of Finance Mihály Varga at Márka Üdítőgyártó Kft’s capacity expansion investment announcement in Felsőlajos, Bács-Kiskun county on October 2, 2020. The fully Hungarian Ltd.. For its investment of almost HUF 105 million, it won a grant of HUF 72 million in the tender for the Operational Program for Economic Development and Innovation (EIDHR). Source: MTI / Bús Csaba
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