CEE Region Economies Recovering Faster than Mediterranean, PM’s economic advisor says

Hungary’s economy has already recovered from effects of the pandemic, similarly to the economies of Poland, Romania, Lithuania, and Latvia, while the national economies of several Mediterranean states need a lot more time, Márton Nagy, senior economic advisor to Prime Minister Viktor Orbán, said on Tuesday evening.

Nagy said in a statement that central and eastern European economies had grown without accumulating excessive debt while at the same time maintaining almost full employment.

Referring to remarks he made at a conference organized by business portal portfolio.hu, he added that the region was the least reliant on allocations from the EU’s post-pandemic recovery fund, while it was also in a good position to “outgrow” the debt accumulated over the past pandemic period.

“Countries in the Mediterranean are, on the other hand, in trouble, and could slip into a debt crisis, especially if the central banks of developed countries start a tightening,” he said.

Nagy attributed Hungary’s success in managing the pandemic-related crisis to several factors.

Hungary’s economy was balanced and growing when the crisis hit, giving the country ample fiscal and monetary room for maneuver to adopt targeted stimulus measures, he said.

Hungary’s economic policy, he added, remained focused on supporting employment and families. It was also better geared towards responding to the challenges posed by the crisis faster and more flexibly than euro zone countries.

Nagy said inflation was higher in countries where the economy had recovered quickly and in which the jobless rate had been kept low. The cost of a bold economic stimulus was a temporary rise in inflation, he added. “Without a temporary rise in inflation, the economy would have recovered more slowly, and many people would have lost their jobs. Now it is the central bank’s task to curb … inflation,” the advisor said.

Featured photo by Tamás Kovács/MTI