Standard & Poor's downgrading means that Hungary is still within the category of investment grade, but only by a narrow margin.Continue reading
According to the latest data from the Central Bank of Hungary (Magyar Nemzeti Bank, MNB), the ratio of public debt to gross domestic product improved more than expected from 76.8 percent down to 72.9 percent last year, Finance Minister Varga Mihály announced on Monday.
Hungary is still able to achieve economic growth above the EU average and reduce public debt despite the fact that it has still not received the recovery funds it is entitled to, the Finance Minister stressed. “Even in dangerous times, we will continue to improve our balance indicators, expecting a further decline in public debt and a lower deficit,” he confirmed, adding that the Hungarian economy is avoiding recession and could grow above the EU average this year.
Based on preliminary financial accounts data, the Central Bank of Hungary announced on Monday that gross consolidated public debt at nominal value, including Eximbank’s debt, amounted to 48,840 billion forints (EUR 127 billion), or 72.9 percent of GDP.
The Ministry of Finance said in early February that the Hungarian economy had proved resilient to the challenges of war and sanctions. According to their statement,
the government’s measures provide a strong basis for the Hungarian economy to avoid a downturn this year and return to growth above four percent next year.
In 2023, the budget will continue to provide the necessary resources to protect jobs, increase family support, maintain the cuts in utility bills at the average level of consumption, and preserve the value of pensions. “Meanwhile, the deficit and public debt will be further reduced,” they stressed.
A similar positive outlook was expressed by Economic Development Minister Márton Nagy, who said that Hungary could avoid a recession this year. He emphasized that inflation must be tackled and the twin deficits resolved, which is only possible if the government’s economic policy remains innovative. Inflation could be in the single digits by the end of the year, and the government deficit-to-GDP ratio could be reduced to close to 70 percent, he underlined.
Featured photo via Pixabay
