PM Orban on wage hikes: More, more, this much's not enough!

August could be the month to bring a change, with wage growth outpacing inflation, Prime Minister Viktor Orban told Hungary's public Kossuth Radio on Friday morning. While 2023 was the year of pushing down inflation, 2024 will be the year of restarting economic growth, Hungary's prime minister said. He also emphasized that in the future, the government will continue to do everything it can to maintain its cap on energy tariffs. Speaking about last week's intensive diplomatic activities, he noted that without energy the whole country, its economy and life in general will draw to a halt, which necessitates energy security.

"When it comes to wages, the chanting of hardcore football fans applies: more, more, more, that's not enough," said Viktor Orban on Kossuth Radio's program Good morning Hungary. At the time of the regime change, we switched to a private economic system, and wages started from a very low level then, Hungary's prime minister recalled.

"The rate of wage increases can never be enough," he added. He said the government helps employers and workers negotiate, but only intervenes as a last resort.

"We are working to ensure that wages catch up with the rate of price increase after August,"

Viktor Orban pointed out.

August could be the month to bring a change, with wage growth outpacing inflation, he said adding that we are ahead of a difficult autumn, with the goal of wage growth outstripping inflation. The Hungarian premier is confident that by the end of the the year, price increases and wage growth will be close to the same level.

It is important that the second half-year corrects a difficult first half

The economy has been stable since 2012, PM Orban pointed out.  "Since then, there has not been a year, or even a quarter of a year, when prices have risen faster than wages. Of course, people may have felt the opposite, but it is a fact that there has been no drop in real wages for 11 years. By contrast, the first half of this year saw a drop. The first half of the year was therefore a very difficult period, which is why it is important that the second half of the year should correct the first half ," he underlined.

One part of the price increases could be explained, Viktor Orban said.

The war led to supply disruptions, and then came the sanctions from Brussels, which sent energy prices skyrocketing. However, price increases also had a part that was seen unjustifiable. This was the case with large multinationals, which maintained a price level that was much higher than what would have been justified by fair profit making.  It was therefore necessary to take action against this. Since dissuading multis is difficult, the government had to show teeth, claws and  strength. And the rules paid off,

PM Orban explained.

He also highlighted that the Competition Office will continue to have the instruments, with which  it has managed to curb inflation and prices, meaning that the competition authority will continue to be present so that multinationals cannot use their tricks for speculating with prices.

2024 will be the year of restarting economic growth

While 2023 was the year of pushing down inflation, 2024 will be the year of restarting economic growth, the Hungarian premier said. For example, he said, rising bank lending rates are unaffordable for entrepreneurs, so they need loans with lower interest rates.

"The issue of jobs is a top priority, and our goal is for every Hungarian to have a job, because we are talking about a work-based economy. Today, 4.8 million people are in employment, up from around 3.6 million in 2010,"

he said.

He emphasized that the government will continue to do everything possible to keep the caps on energy tariffs. Last year, utility price caps cost four thousand billion more than before. "The government is doing everything to maintain the caps on energy tariffs, and it will help families as it has done so far. The caps leave 472 euros every month in families’ pockets. This is the amount that they should otherwise pay, but they would not be able to. The Hungarian utility bill reduction scheme must be protected. It is a thorn in Brussels' side, because people pay the lowest gas prices in Hungary. Many countries have their own energy sources, we import it, and yet they make their own citizens pay more than we do. This is why Brussels is attacking us, but we cannot have any regard for it, PM Orban said.

Energy security is needed

On last week's row of diplomatic meetings, PM Orban said that the country, the economy and life will come to a standstill if there is no energy, so we need energy security. "Everything used to come from Russia through Ukraine, but now there are sanctions and the Ukrainians are now saying that no energy will arrive from their direction in 2024. So we looked for another route, from the south. Turkey has no gas or oil production of its own, but it is a key player in this sector. Any gas we can get from the south will come through Turkey, they control the tap," he said.

Orban also spoke about the plan involving four countries that would result in cheaper gas and electricity imports from the direction of Azerbaijan.

Leaders arrived in Qatar one after the other so that European countries would also be able to buy from the lviquid natural gas transportable by ship, PM Orban said. “I also went in May, and now the Emir has returned the visit and we have agreed on how gas will be transported from Qatar to Hungary by ship," the premier said.

He stressed that the policy of government's policy of eastward opening is now a huge advantage for Hungary. We have been building relations for a decade now, we are a whole decade ahead of the others. That's why I always say that a country the size of Hungary cannot afford to be make silly decisions, and its leaders should not be foolish. We tried that before, but it didn't work," he said.

This also applies to the arms sector, PM Orban said. "We started developing the arms industry well before the war broke out. We concluded the strategic agreements that are now being fulfilled on the production line in 2016-2017," he stressed.

Hungary has the world's attention

Talking about the Athletics World Championships, the prime minister said the stadium is fantastic. "Anyone who has been there could see that any malignancy disappears at the door and everyone is happy. This proves that sport can make a positive contribution to people's quality of life," he said. Orban stressed that athletes carry Hungary's good reputation and speak of the country in superlatives. He congratulated hammer thrower Bence Halasz and other Hungarian athletes. 

“This world championship proves that it contributes to people’s quality of life and that athletes bring Hungary's good name. Foreigners can see for themselves that Hungary is a good place to be,”

he added.

“Apart from the world's attention, if you look at all the sports diplomacy and stadium construction from a distance, it is also about life outside of sport. Despite all the naysayers, these community spaces serve all well-meaning Hungarians, and they also provide space for cultural events outside of sport. Culture no longer stops at Vienna," said the prime minister.

Cover photo: Prime Minister Viktor Orban in the studio of Kossuth Radio (Photo: MTI/Prime Minister's Press Office, Zoltan Fisher)