Hungary's prime minister has announced a raft of measures aimed at boosting the country's declining birth rate and reducing immigration.

Giving his annual State of the Nation address Sunday, Hungarian Prime Minister Viktor Orban announced a seven-point "Family Protection Action Plan" designed to promote marriage and families.

Measures announced included waivers on personal income tax for women raising at least four children for the rest of their lives and subsidies for large families to buy larger cars. The 'action plan' also extended a loan program to help families with at least two children to buy homes. Every woman under 40 will also be eligible for a preferential loan when she first gets married.

The government has also said it will spend more on Hungary's heathcare system and will create 21,000 creche places. In addition, grandparents will be eligible to receive a childcare fee if they look after young children instead of the parents, Orban said.

"There are fewer and fewer children born in Europe. For the West, the answer (to that challenge) is immigration. For every missing child there should be one coming in and then the numbers will be fine," Orban said, Reuters reported.

"But we do not need numbers. We need Hungarian children," he said, announcing the incentives program.

Referring to the action plan, Orban said "this is Hungary's answer (to challenges) rather than immigration," he said, according to English-speaking news service Daily News Hungary.