Márton Nagy encourages government bond investments

“The government’s latest measures would strengthen the demand for government securities. They expect that hundreds of billions of forints worth of savings can be mobilized,” said Minister of Economic Development Márton Nagy at a background discussion on Thursday, which was reported by VG.hu. The notification – which must be submitted between October 1, 2023 and December 31, 2023 – must contain a detailed and clear table in which the credit institution calculates how much return the given customer could have achieved in a specific period if he had 100,000, 500,000 or would have invested HUF one million in Hungarian government securities.

The legislation encourages credit institutions to increase their holdings of long-term government bonds, thus promoting self-financing. Photo: Attila Kovács

The form and content of the information can be determined in a joint decree by the minister responsible for general political coordination, i.e. Antal Rogán, and the minister responsible for the regulation of the money, capital and insurance market, i.e. Márton Nagy.

According to the decree, in the warning notice, the government requires the presentation of the yield that can be obtained by investing in at least one asset per type of government bond, such as the Discount Treasury Bill issued and which can be purchased or subscribed for on October 1, 2022, and the Treasury Savings Ticket or the Hungarian Government Bond Bond among the retail government securities .

Three economic strategic goals lie behind the government’s actions: preserving the real value of the population’s real income, curbing the increase in the share of foreigners in the debt, increasing the financial education of the population, and reducing the costs of state financing, VG.hu quoted Márton Nagy.

According to the head of the ministry, the government’s measures can generate demand for government securities worth hundreds of billions of forints.

As he said, domestic investment funds, including bond funds, have substantially increased their deposit portfolios in the past period, which resulted in a decline in the demand for government securities. At the same time, the demand for government bonds by residential actors increases if the obligation to pay social contributions comes into force after financial investments, which also increases the attractiveness of government bonds for households.

We want to make people understand that their deposits may lose their real value

– said the minister, adding that “there are HUF 8,000 billion uncommitted funds in the retail current accounts, which can currently mean a huge lost income for the account holders in an environment of interest and inflation.”

The basis for the bank extra profit tax in 2024 is the 2022 pre-tax profit reduced by the 2022 dividend income, plus the items that can be accounted for as individual expenses. The tax rate is 13 percent for the part of the tax base up to 20 billion forints, and 30 percent for more than 20 billion forints. For the entire year, a payment of HUF 250 billion is expected in the case of no tax.

The legislation encourages credit institutions and financial enterprises to increase their holdings of long-term government bonds, thus promoting self-financing. Márton Nagy pointed out that the measure could generate approximately HUF 1,300 billion in potential government bond demand.

The repurchase of the airport may be completed at the end of the year

The government is negotiating with a lot of investors – he said about the repurchase of the airport, according to whom they are in the middle of the process, but he maintains that the transaction can be concluded at the end of the year. He emphasized that the state wants to acquire majority ownership, but at the same time he denied the rumors to Világgazdaság that they would like to push out foreign companies here, as he said, German companies feel good in Hungary.

Cover image: Illustration Photo: Árpád Kurucz

Source: Magyar Nemzet by magyarnemzet.hu.

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