“The primary goal of Hungarian economic policy is to protect the economic results achieved so far, and to regain the momentum of economic growth”, it states in the Convergence Programme submitted to the European Commission by the Ministry of Finance. The document calculates with 3 percent economic recession and a target budget deficit of 3.8 percent for this year, with economic performance possibly increasing to 4.8 percent next year.
In contrast to this year, when the document centred on economic growth in excess of the European Union average and falling sovereign debt, at the focus of this year’s document lies the economic crisis caused by the coronavirus epidemic.
In view of the fact that handing the direct and indirect economic consequences of the coronavirus crisis requires an increased role on the part of the treasury, the budget deficit will exceed the original target for this year; it is expected to be 3.8 percent, falling to 1 percent by the end of the programme period.
The document forecasts a 3.0 percent reduction in GDP this year, but in 2021 growth could reach 4.8 percent, and GDP growth of over 4 percent is expected between 2022 and 2024. Following a slowdown in the falling trend of the sovereign debt to GDP ratio this year, the tendency is expected to return in 2021, and in 2024 the debt rate could fall below the 60 percent benchmark value.
Hungarian economic policy remains committed to the convergency process, which the government wishes to achieve via the improvement of competitiveness, the continuation of tax cuts, and responsible fiscal management.
Thanks to the economic policy of recent years, in March the virus met with a resistant economy that had a balanced structure, and accordingly the rebooting of the Hungarian economy may also be successfully assisted by the economy protection measures.