HUNGARY wants to kickstart its economic recovery from the coronavirus pandemic by boosting investments and reducing taxes, Prime Minister Viktor Orban said Friday, adding that extending the government’s job support scheme was a backup plan.

Nationalist Orban, who has been in power for more than a decade, faces the toughest challenge of his rule now as the economy is expected to shrink by up to 6 percent this year while new COVID-19 infections are surging.

Hungary’s weakened economic prospects could represent a threat to Orban as he prepares to face parliamentary elections in the first half of 2022.

“Investment, investment, investment. Tax reduction and investment,” Orban said in an interview in Brussels when asked how he would try to improve the economy. “We concentrate on investments because if we have investments we have jobs.”

This, he said, would be enough to get growth going again, even without Hungary’s share of the European Union’s new recovery fund worth 750 billion euros (US$970 billion) for the whole bloc.

When asked if the government would extend a job support scheme which expired a month ago, he said: “If there is a reason to do so we will do it but up till now we concentrate more on investment.”

The economy shrank 13.6 percent in annual terms in the second quarter, the deepest contraction on the EU’s eastern flank, and the recovery is expected to be slower than previously expected.

Asked about the forint currency, which dropped to five-month lows versus the euro this week prompting a surprise rate hike by the central bank Thursday, Orban said the exchange rate was the central bank’s job.

(SD-Agencies)