Given a sufficiently rapid turnaround, by 2030, Hungary could reach the average level of economic development in the European Union at that time, the governor of the Hungarian National Bank György Matolcsy wrote in an article on Növekedés.hu on Monday.
He emphasized that we need a rapid recovery and strong growth after the dramatic way the 2020s began. He wrote:
“Whether we capitalize on or waste an historic moment will be decided at the beginning of the new decade.”
Matolcsy also stressed that programs aimed at increasing the country’s competitiveness have to be initiated now in order to bear fruit throughout the decade to come. He noted that out of the 50 most impactful reforms of the last ten years, 43 were started between 2010 and 2013.
“Today, we first have to reattain growth, and with its results recover balance,”
he wrote. The National Bank has recently revised its growth predictions for the coming years. It now expects the economy to contract between 5.1% and 6.8% this year. This is more or less in line with the expectations of the Ministry of Finance and the European Commission.
Matolcsy added that development and competitiveness have to be dealt with in parallel. Utilizing EUR 50 billion each from domestic and EU sources, all goals currently set are attainable simultaneously. He brought Austria’s success as an example, where about 170 family businesses that exploited market opportunities globally and therefore grew large provide the backbone of the economy. He believes it is worthwhile to attempt to replicate this, except Hungary must target different opportunities. He also wrote that in this decade, those who do not digitize all possible aspects of their business will not succeed.
Matolcsy believes that for a successful recovery and in order to increase competitiveness, the structure of the economy’s physical environment must be transformed. He envisions a Budapest Region encompassing 4 million people, which draws from Hungary’s city networks such as the Debrecen–Nyíregyháza–Miskolc–Szolnok net, the Győr–Szombathely–Sopron net, and the Balaton–Veszprém net.
In order to succeed, Matolcsy writes, Hungary also needs to invest in strategic industries abroad, both within the Carpathian Basin and without, in a way that produces profit at home. He thinks that apart from direct foreign investment in modern industries and the service sector, Hungary also needs to develop its own industry in order to prosper.
Featured photo illustration by Zsolt Szigetváry/MTI