He argued that a loss of economic policy direction between 2021 and 2024 has undermined the achievements of the 2010's and jeopardised attainment of the goals set for the period up to 2030.

Hungary has two dangerous adversaries, Mr Matolcsy said, high and costly indebtedness and high and stubborn inflation.

Mr Matolcsy said there had been a wrong turn in economic policy, the government failed to control the budget deficit and did not join the central bank in the fight against inflation for one and a half to two years.

Mr Matolcsy said because of inflation a significant number of households and businesses suffered such a loss of wealth that "victims of the inflationary shock" have arrived: those who do not consume and those who have lost half of their reserves. The expenses of the state budget this way increased and its revenues decreased, he added.

He said it is a faulty economic policy to claim that real wage growth will automatically lead to consumption. Real wages cover only half of incomes, the real value of pensions and social expenses did not increase, he noted.

The central bank governor said we have moved from a nearly balanced budget to a permanently high deficit, and it is unacceptable and life-threatening to carry such a deficit through the decade.

Mr Matolcsy said a green re-industrialization is needed and a new service sector because it helps to balance the current account.

Central bank gov has a personal problem, not a professional one - PM's political director

National Bank of Hungary (NBH) governor Gyorgy Matolcsy has a personal problem, not a professional one, Balazs Orban, the prime minister's political director, told news site Mandiner.

Mr Orban was commenting regarding Mr Matolcsy calling for a complete turnaround in Hungary's economic policy at the 62nd Itinerant Conference of Economists.

Mr Orban noted that the central bank governor has a long-standing personal dispute with the minister responsible for Hungarian economic management, and according to Mr Orban, this seems unresolvable.

He said that while the disagreement weighs on the economy, it will ceases at the latest on March 3 next year when the current mandate of Mr Matolcsy expires.

The government is not giving up its goal of making Hungary one of the five most liveable countries in Europe by 2030, he added.

Source: 
MTI - The Hungarian News Agency, founded in 1881.

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