freelogoOur objective is to provide English speaking readers interested in Hungary with a well balanced view of political activities in Hungary by featuring contents from various printed and online sources together with our own commentaries. We are convinced that Hungary is built on all sorts of different ideas, thoughts and opinions and, despite of the new Media Law, our aim is to provide an alternative and reliable source of information – contrary to the one-sided press of the government – for those who want to hear the voice of a free Hungary.

Excerpt from the interview with Christoph Rosenberg, IMF mission chief for Hungary

IMF Survey online: Describe the headwinds Hungary is leaning against.

Rosenberg: Much like the rest of Europe, Hungary faces the difficult task of addressing large debt burdens in an increasingly difficult growth environment. At the same time, traditional economic options such as loosening fiscal or monetary policy are more constrained than in many other countries in the region.
Because Hungary is a small open economy, it is very exposed to what happens in Europe and emerging markets world wide through trade and financial channels. Hungary has one of the highest export-to-GDP ratios in the region, and is strongly integrated with the German economy, which has been a plus in the last two years. But growth in the euro zone is predicted to slow down and that will affect Hungary as well, especially since exports have been the only source of growth since the crisis.
Equally important is financial integration. Hungary’s public sector is highly dependent on foreign financing. Almost two-thirds of Hungary’s public sector debt, which stands at about 80 percent of GDP, is held by foreigners, both foreign currency-denominated debt and domestic currency-denominated debt.
Similarly, the financial system depends heavily on foreign funding. Those investors, who roll over their exposures to the tune of €35–40 billion annually, are at times concerned by the policies pursued in Hungary. They are also, of course, also highly influenced by what happens in financial markets elsewhere.
In this difficult external environment, a key challenge is to support growth. As I said, external demand is weakening, but at the same time domestic consumption and investment have been extremely weak. There are many headwinds here: low real wage growth, rising debt service, unemployment, a credit crunch. Importantly, confidence has suffered in a policy environment that is perceived by many investors and consumers as unpredictable and discriminatory.
Unfortunately, there is no easy way to jumpstart growth in the short run. Fiscal stimulus is not an option for Hungary. The budget deficit needs to be reduced to ensure that debt remains sustainable, financing needs are contained, and European Union deficit targets are met. Lowering the central banks’ interest rate is not an option either, as this would lead to a weaker exchange rate and increase the debt burden of both the public and private sector, which are heavily indebted in foreign currency.”
Source: IMF Survey online

Last Updated on Friday, 30 August 2013 09:11



Written on 21/12/2017, 21:09 by admin
jerusalemJerusalem, the eternal capital of the state of Israel and the Jewish people, finally got the official recognition which was overdue for decades....
Written on 13/09/2017, 20:13 by admin
guest-post-eu-and-orban-two-good-friendsThe decision of the European Court of Justice, according to which Hungary should accomodate more than one thousand refugees is at the same time appaling...
Written on 06/10/2016, 19:58 by admin
guest-post-the-day-after-the-referendumThe much anticipated referendum about the resettlement of migrants in Hungary was declared invalid, however, those who voted overwhelmingly rejected the...
Written on 23/06/2016, 06:31 by admin
disintegration-or-something-else-gyurcsany-s-solutions-to-the-ills-of-western-democracies  Something has gone wrong. Quietly, but ever more noticeably, more and more people in more and more places are in revolt. In the American...
Written on 06/04/2016, 19:20 by admin
how-germany-and-its-leftist-liberal-supporters-killed-solidaritySolidarity. This is the word that is probably is the most used and misused term in European politics. Its original meaning is supposed to mean to show...
Written on 23/03/2016, 20:30 by admin
the-orban-regime-can-only-end-in-failure  Change in the Orbán regime is only possible in the event of its downfall, so ruling Fidesz either becomes successful with its current set of...
Written on 23/03/2016, 20:20 by admin
anger-or-resignation  No matter how hard Mr Orbán is trying to get rid of his old cronies, he just cannot get rid of himself. He is too old for his system. The...
Written on 14/01/2016, 20:51 by admin
europe-s-new-yearThe European continent had a very difficult year in 2015, but that may be dwarfed by 2016. The most heated issue will be, without a doubt, the migration...
Written on 09/12/2015, 14:16 by admin
the-secret-diaries-of-viktor-orban-nov-dec-2015November 14th 2015I awoke to the shocking news about the Paris attacks last night. Words cannot express my feelings of shock.It turns out that one of the...
Written on 12/11/2015, 14:31 by admin
spies-in-the-newsroom   According to a new scheme, the government might place spies in the newsrooms, to have a better view of what is being written. This all...
Joomla templates by Joomlashine