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Finance Minister: GDP Expected to Fall 5 Percent in 2020

MTI-Hungary Today 2020.07.23.

Hungary’s GDP is expected to fall 5 percent in 2020, Finance Minister Mihaly Varga told public Kossuth Radio on Thursday.

The economy strengthened somewhat in June, but GDP in the second quarter is still expected to fall by 10 percent annually, Varga said.

The economy suffered a 20 percent setback in April in annual comparison, the largest fall recorded yet during the coronavirus pandemic, Varga said. The fall slowed in May, and the trend turned in June, he said.

The budget deficit at the end of H2 was at 3.8-4 percent of GDP, or 1,800 billion forints (EUR 5.2bn), the minister said. It was originally forecast at one percent of GDP, or 488 billion forints (EUR 1.4bn), he said. Spending was driven by the 600 billion forints allocated to the pandemic protection fund and the 1,100 billion for the economy protection fund, he said.

Restarting the economy and a potential second wave of the epidemic may increase the deficit further, he added.

Varga noted that Hungary’s economy was robust when the epidemic hit the country, with a five-percent growth in 2019 and 2 percent in Q1 2020.

featured photo: Lajos Soós/MTI