* Stimulus measures to bolster economic growth -ministry
* Inflation to rise to 3.1 pct by 2018 election year
* Bank tax will not be cut further from 2017 levels
(Adds details, changes story slug to HUNGARY-ECONOMY/ from
BUDAPEST, Dec 20 Hungary's government sees
economic growth accelerating to over 4 percent in the next two
years, the Economy Ministry said on Tuesday, after unveiling a
batch of stimulus measures as Prime Minister Viktor Orban eyes
elections in 2018.
The sharp upgrades in the growth outlook follow an agreement
with private sector employers on big hikes in the minimum wage
for the next two years in return for cuts in payroll taxes and a
reduction in the corporate tax to a flat 9 percent.
"The agreement substantially affects the macroeconomic
developments of the coming years, putting the Hungarian economy
on a higher growth trajectory," the ministry said, adding that
the main driver of growth would be higher consumption.
Orban's cabinet sees economic growth rising to 4.1 percent
next year and 4.3 percent in 2018, when elections are due, the
Economy Ministry said, up from its previous 3.1 and 3.4 percent
Orban, whose ruling right-wing Fidesz party has a firm lead
in opinion polls, had embarked on an independent policy course
shortly after coming to power in 2010.
He had imposed big windfall taxes on banks, energy
providers, telecoms and retail firms, in moves that upset
investors. He also nationalised private pension savings worth 3
trillion forints ($10 billion).
These measures have helped rein in the country's budget
deficit, however, and this year the three big international
rating agencies have all raised the country to investment grade
after five years of "junk" status.
After hovering around zero for years, inflation is seen at
1.6 percent next year, rising to 3.1 percent by 2018.
The Economy Ministry said the budget deficit would remain
below 3 percent of gross domestic product next year and decline
in the coming years.
The government expects the level of the bank tax to remain
unchanged from 2017 levels through 2020, it said.
The 2017 budget is based on a projection of revenues worth
66.5 billion forints from the bank levy, which was lowered this
year following an agreement between Orban's government and the
local bank sector.
The government has said that banks that substantially boost
lending to companies would get a rebate from another tax levied
on financial transactions.
($1 = 299.2100 forints)
(Reporting by Gergely Szakacs and Sandor Peto; Editing by Hugh