Hungarian Prime Minister Ferenc Gyurcsany said on Saturday that Hungary must balance its economy to achieve faster growth after years of prioritizing higher wages and social expenditure.

"Hungary's efforts to catch up with the front-line European economies have slowed," Gyurcsany told members of his Socialist Party.

"We made things easier for people, but we slowed the country down," Gyurcsany said, adding that the main issue now was whether Hungary was capable of shifting to a higher speed.

The country's GDP increased by 5.2 percent in 2004 and around 4 percent in the last two years. Authorities forecast growth of 2.2 percent in 2007 and 2.6 percent in 2008.

In the past few months, the government has introduced higher taxes, direct payments for some healthcare services and tuition fees for most university students.

Subsidies for household energy use have also been reduced and thousands of public employees have been laid-off.