“Fourth Covid Wave Won’t Hurt Economy”

Economy National
Thanks to the high inoculation rate, the fourth wave of the coronavirus pandemic is expected to be relatively weak in Hungary, allowing for an estimated 7% GDP growth this year, Finance Minister Mihály Varga said.

The deficit is expected to come to 7.5% of GDP, Varga told the Portfolio Economic Forum. Monetary and fiscal policy “must work together” to bring inflation back to around 3%, he said. The government sees CPI falling from the beginning of 2022 and the situation “normalising” by the summer of 2022 to make the mid-term 3% target achievable by year-end, Varga said. The CPI target should be achieved gradually so as to avoid a “new wave of recession”, Varga added. The government is committed to start reducing the public debt, which has risen to 80% of GDP due to the economy protection measures, he said. “Politically motivated debates” with the European Union are expected to “run their course” by the end of the year, clearing Hungary’s access to the recovery funding, he said. Anticipating lengthy negotiations, the government took out a 4.5 billion euro loan from the market in early September, so investment programmes suffered no delay, he added. Hungary’s economy is expected to return to the growth trajectory it was on in 2019, “albeit in a slightly different structure”, Varga said.




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