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Finance Minister: GDP Could Be Down by 6.4% in 2020

MTI-Hungary Today 2020.10.27.

The GDP of Hungary could fall by 6.4 percent this year and economic trends could start to change from the second quarter of 2021 with a vaccine against the coronavirus possibly available by that time, Finance Minister Mihály Varga said at an annual hearing before a parliamentary committee on Tuesday.

The finance ministry is working to restore the country’s growth momentum and a proposal covering the years 2020 to 2023 is being drawn up for financial restructuring, the minister said, adding that it is clear the economy will only recover at a slow pace from the coronavirus pandemic.

Negative Growth and Higher Inflation Predicted by Hungary's National Bank in Revised Forecast
Negative Growth and Higher Inflation Predicted by Hungary's National Bank in Revised Forecast

The National Bank of Hungary now expects the economy to contract between 5.1 and 6.8% this year and annual inflation to be 3.5-3.6%, according to its latest quarterly Inflation Report released on Tuesday. Assuming a V-shaped, rapid recovery from the economic downturn caused by the coronavirus pandemic, the institution previously forecast an annual GDP growth […]Continue reading

Varga told the committee that allocations for the government’s pandemic defence fund originally came to 426 billion forints (EUR 1.2bn) but expenditures have reached 747 billion forints by the past months. Meanwhile, 942 billion forints was initially transferred to the economic defence fund but the amount of used funding is now at 2,059 billion forints.

The budget deficit in 2020 will be significantly higher than in past years and will be around 8-9 percent of GPD according to the ministry’s calculations, Varga said.

In the featured photo illustration: Finance Minister Mihály Varga. Photo by Tamás Kovács/MTI