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Hungarian Press Roundup: National Bank Cuts Base Rate

Hungary Today 2020.06.26.

A pro-government analyst welcomes the National Bank’s decision to cut the base interest rate to 0.75 per cent in order to boost growth. A left-wing commentator fears that the Forint will sink further and Hungarian families will save less.

Hungarian press roundup by budapost.eu

Magyar Hírlap’s Gábor Putsay deems the National Bank’s decision to cut the base interest rate a boost to the government’s program to kick-start the economy after the coronavirus. The pro-government analyst thinks that in order to achieve the National Bank’s 0.3-2 per cent growth target for 2020, the economy needs cheap loans. Putsay finds it reassuring that the government and the National Bank are coordinating their efforts to speed up economic growth and create jobs.

 

In Népszava, Miklós Bonta thinks that the rate cut will further weaken Hungary’s economic resilience. The left-wing commentator recalls that the Forint has weakened significantly against the Euro in the last year, and the base rate cut may send the Hungarian currency even lower. Bonta adds that lower interest rates will also disincentivize saving and boost spending. This, Bonta acknowledges, may boost GDP growth, but lower savings will also make Hungarian families less resilient in the next economic crisis.

Featured photo illustration by Noémi Bruzák/MTI