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Coronavirus – Matolcsy: MNB Stands by 2020 GDP Forecast

MTI-Hungary Today 2020.05.10.

The National Bank of Hungary (MNB) is leaving its GDP growth projection of 2-3 percent for this year unchanged, rather than projecting a contraction, György Matolcsy, the central bank’s governor, told pro-govt public broadcaster Kossuth Rádió on Sunday.

Economic forecasts being released across Europe reflect a variety of approaches, Matolcsy said. Two financial institutions, namely the Polish and Hungarian central banks, are even more optimistic in their forecasts than the International Monetary Fund (IMF) and the Hungarian government, he added. These institutions are predicting a V-shaped economic recovery, the governor said.

He said that while the first quarter indicators “won’t be bad”, the second quarter “will generate some pretty awful figures”. However, the third and fourth quarters are expected to make up for the losses, Matolcsy said, adding that this was the central bank’s basis for putting this year’s growth rate at around 2-3 percent.

The governor said the MNB’s forecast was backed up by the fact that “most of the Hungarian economy is working” and had also been working “during the low point that was April”.

Matolcsy added, at the same time, that certain sectors of the economy like tourism, the hospitality industry, the cultural sector and the shipping industry were vulnerable or in crisis.

He expressed hope that the Q1 GDP figures would reflect the central bank’s optimistic outlook.

New GDP Predictions for Pandemic-Hit Hungary

Matolcsy noted that the MNB had recently launched a new programme dubbed Funding for Growth Scheme Go! Financial institutions have already signed dozens of loan contracts, he said, adding that hopefully, tens of thousands of contracts would be signed with businesses. Most companies so far have applied for loans for salary payments, he added.

featured image by Zsolt Czeglédi/MTI