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Matolcsy: Gov’t Can Temporarily Ignore Deficit and Public Debt Targets Until 2022

MTI-Hungary Today 2020.08.31.

The government can temporarily ignore deficit and public debt targets for a couple of years but these targets must be restored from 2022, György Matolcsy, the governor of Hungary’s central bank, has said.

“Hungary has financial resources from the [European Union], the NBH, the banking system, and the savings of households and businesses that are unmatched in the country’s economic history,” the National Bank of Hungary (NBH) governor said in an article published by Novekedes.hu on Monday. These resources will tide the country over for a while, but in the longer term the “temptation” to veer away from the proven recipe of “balance and growth” must be resisted, he added.

Preserving social cooperation and political stability is the “most important” challenge at hand, he said. But a strategy for achieving convergence with the rest of the European Union is also needed while maintaining fiscal discipline, he added.

He said Hungary should aim to reach Austria’s level of economic development and quality of life by 2030. “This may not happen by 2030, but a clear timetable must be followed in the coming 20-25 years: lacking this, we face the historical risk of never fully implementing convergence.” To achieve convergence, he proposed a “revolution of competitiveness” and a strategy that is “clear, deployable, achievable and flexible”.

Featured photo illustration by Zsolt Czeglédi/MTI