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Index – Economy – This would change everything in the car market, Márton Nagy put a new review on the horizon

As part of the visit to Germany by the delegation of the Ministry of National Economy, Minister of National Economy Márton Nagy held personal talks with Minister of Economy and Climate Affairs Robert Habeck, and on Monday with Parliamentary State Secretary of the Ministry of Finance Florian Toncar and State Secretary for International Finance and European Policy Heiko Thoms.

According to the ministry’s announcement, the focus of the talks was primarily on the prospects and competitiveness of the German economy, as well as the future of the automotive industry, especially electric car production. Márton Nagy emphasized at the conference that Germany is one of Hungary’s most important economic partners.

The two economies have been linked by a thousand threads for decades: Germany was Hungary’s number one trading partner last year, its share in total foreign trade was 24 percent, and the Germans are the most decisive investors in our country. The stock of foreign direct capital investments in 2022 amounted to 18.7 billion euros – 18.6 percent of the total Hungarian FDI stock.

Green energy is the future of the Hungarian economy

Márton Nagy also stated that Hungary is interested in a strong, competitive European and German economy. According to him, it is necessary to compete with the rapid development of the American and Chinese economies, and European production must be made competitive.

This aspiration will also appear among the competitiveness priorities of the Hungarian EU presidency in the second half of 2024.

According to the government’s point of view, it is necessary to increase digitization, the support policy should be made more targeted, and a new unified European industrial strategy is needed, which is based on the opinions of the sector players. Márton Nagy also touched on the fact that, while in 2018, 1 percent of newly sold cars in Europe were purely electric, by 2023, nearly 15 percent will be.

The Hungarian government acted on time, 21 investments in the field of electric car production have been implemented or are underway in our country, worth more than 16 billion euros. As a result, the ecosystem of the vehicle industry and electric vehicle production in Hungary is strong, batteries and vehicle exports account for nearly 25 percent of the country’s exports, and battery exports alone exceed 5 percent in proportion to GDP. Green energy is the future of the Hungarian economy

can be read in the communique.

According to the statement, the head of the ministry also stated that we are currently seeing a temporary slowdown in the rise of electric cars, and that the sector needs to be helped with an EU-level support program to regain momentum. Special attention must be paid to the reduction of administrative burdens, the charging network, including the possibility of charging at home, and related developments affecting the energy network, as these are currently a significant obstacle.

In addition to the high importance of the charging network, the negotiators emphasized the need to redefine carbon neutrality in the case of car drives by 2035 and strive to ensure that the technologies compete with each other.

Furthermore, in 2026, it is worth revising the regulatory date of 2035 in connection with the ban on internal combustion engines in the light of the 2025 data, according to how realistic the objective is – reads the announcement of the Ministry of National Economy.

The impact of the German economy

Previously, Finance Minister Mihály Varga, and last week Márton Nagy also pointed out that economic growth this year could be 2-3 percent instead of the previous expectation of 4 percent.

In this regard, the head of the ministry he said to Index’s questions in the past few daysthat the government’s prognosis changed so quickly because the expectations regarding the German economy were not met, “this is clearly visible in the export data”.

According to the head of the ministry, there were already signs of this in the last quarter of last year.

ACCORDING TO MÁRTON NAGY, THE GOVERNMENT’S EXPECTATIONS HAVE OBVIOUSLY DECREASED DUE TO THE WEAKNESS OF THE GERMAN ECONOMY AND THE VEHICLE INDUSTRY.

According to the head of the ministry, growth depends on residential consumption, investment and net exports – the latter turned negative.

“Consumption is coming up as we thought, we can see this in February’s retail sales as well. Food retail continued to rise, the overall picture was dragged down by fuel consumption. I don’t think that’s the problem,” Márton Nagy added.

He then reminded that he also thinks the Prime Minister’s prognosis is correct, and that a 2.5 percent increase is expected for this year.

Also, we already wrote at the beginning of February that the German economy has clearly come to a serious halt, and this could have significant consequences for the Hungarian economy as well. “In the next period, the international environment will be more of a restraining force than a supporting one” – he summarized for the Index then head of the Economic Policy Workshop of the Mathias Corvinus Collegium.