“The strong foundations of the Hungarian economy continue to afford the government significant room for manoeuvre for its crisis management measures”, Minister of Finance Mihály Varga emphasised following the first session of the National Competitiveness Council to be held after the epidemic situation.
As he explained: “There are sufficient resources available to reboot the economy, also thanks to the dynamic growth of recent years”. “The operational group responsible for developing and realising economy protection measures following the epidemic will be holding its inaugural session on 24 June”, the Minister announced.
“Although the spread of the coronavirus has slowed to a major extent here in Hungary, there remain many outbreak sites throughout the world”, it was stated at the meeting. “There are several possible scenarios for recovery; its development is currently being ‘controlled’ by the epidemic”, Mr. Varga stated. “Similarly to the majority or European Union member states, Hungary is thought to have got over the economic low-point in April”, he added.
“Comparing the current situation to the situation caused by the 2008 global economic crisis, it may be stated that Hungary’s economic foundations are considerably stronger today. While, for instance, the growth of the gross national product (GDP) was 1.1 percent in 2008, in 2019 Hungary’s rate of economic growth was 4.9 percent, making it one of the frontrunners in the European Union. The number of people in employment has developed in a similarly favourable manner, and household debt has also fallen significantly, as has the deficit to GDP ratio of government debt, while external debt has fallen from 52-6 percent to 7.9 percent”, he continued.
“The economy protection measures introduced in a timely manner by the government are contributing to the GDP with some 3.7 percentage points, tangibly curbing the recession as a result. The preservation of jobs, the protection of priority sectors, and the various state guarantee and credit programs are assuring the fastest possible recovery from the crisis”, the Finance Minister declared.
“There is currently some four trillion forints (EUR 11.465 billion) in ongoing investment, retail turnover has begun to increase again in recent weeks, and the reduction in the number of jobs has also slowed down”, he stated. With relation to prospects, Mr. Varga declared: “The shortening of production chains and our cost advantage could lead to a further increase in competitiveness, but we must also calculate with the fact that the budget deficit could increase temporarily as a result of the costs of protection and of rebooting the economy”.
At the meeting, reporting on the competitiveness rankings published by the Swiss Institute for Management Development (IMD), Economics Professor Magdolna Csath said Hungary has retained its position despite the global pandemic. “Hungary remains an attractive target for international investment”, she stated.