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IMF: Hungary’s Economy Recovers Steadily

Tamás Székely 2015.04.07.

The International Monetary Fund (IMF) has appreciated Hungary’s recent economic achievements but called for further efforts to maintain growth, reduce vulnerabilities and improve business environment. According to the IMF report, the Hungarian economy is recovering steadily helped by supportive macroeconomic policies and improved market sentiment.

The Monetary Fund said in its country report that there was a welcome decline in vulnerabilities in Hungary but debt levels has remained elevated, leaving the economy prone to shocks, and medium-term growth prospects appear subdued. External and public debt levels remain high and the associated financing needs together with heavy reliance on nonresident financing, large concentration of the investor base, and the economy’s large open forex position continue to pose risks, the IMF said. Hungary’s subdued medium-term growth prospects further exacerbate these vulnerabilities.

At the same time, the state’s increased role in the economy along with sectoral taxes weaken the business environment, while state acquisitions in the banking and energy sectors contribute to the buildup of contingent liabilities, the report said. The IMF expects growth in Hungary to decelerate to 2.75 % this year from 3.6 % last year, to 2.3 % next year, and to 2.2 % in 2017, it said.

via hungarymatters and imf.org photo: mon.hu