Central Bank Of Hungary Governor Criticises Government Covid Crisis Management

  • 16 Dec 2020 8:56 AM
  • Hungary Around the Clock
Central Bank Of Hungary Governor Criticises Government Covid Crisis Management
This year is a black year in the economic history of Hungary but government policy mistakes also contributed to the recession, MNB governor György Matolcsy declared in an online press conference held after the monetary council meeting on Tuesday.

Without a second wave of the pandemic and with better government policy there would be no recession this year, he added.

There is a health, economic and spiritual crisis, but no financial crisis has developed - which is due to the merits of the MNB, he claimed.

The probable 6-6.5% drop in GDP this year will be the fifth highest fall on record, after declines of 12% in 1991, 7% in 1940, and 6.7% in 2009 and also in 1990, he said.

Matolcsy said the second wave added three percentage points to the present GDP decline, the missed acceleration of public consumption added one percentage point, the insufficient stimulus of state fixed capital investments added 1.4 percentage points and the housing policy mistake of restoring the VAT to 27% also added 0.5 percentage points.

As a result, missed and failed government measures are responsible for about half of the GDP drop this year in Matolcsy’s view, Telex calculates.

He said 80% of the major changes planned for the coming decade should be brought forward, including major programmes for pensions, healthcare, demography and housing.

MTI Photo: Zsolt Szigetváry

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