Interest in the Hungarian economic model is rising. Over the past few years Hungary’s most important economic indicators have consistently topped EU rankings.
Following a discussion in London with three credit rating analysts, Gábor Gion, Secretary of State at the Ministry of Finance, said that “The goal is that, like market and economic analysts before them, credit rating analysts will acquaint themselves with Hungarian solutions that could ensure our country’s long-lasting growth.”
The Secretary of State stressed that “Credit rating analysts would typically expect a more dramatic fall in state debt, but even this has no bearing on one of Hungary’s most important economic aims, that has been unchanged for several years: to keep all four economic indicators in continuous balance. This fiscal policy is bearing fruit.” He added that in addition to being recognized by market and financial experts, this fact was also highlighted in the OECD’s country review published on 31 January.
Mr. Gion said that by next year government debt will have fallen below 70 per cent, and could fall below 60 per cent by the end of 2022. He recalled that in 2011 government debt stood at 81 per cent. The 10 per cent decrease is considered large, especially in light of the fact that during this period European Union Member States have reduced their debt by an average of only 1.6 per cent. The EU average is therefore somewhat under 80 per cent, which is higher than Hungary’s.
Mr. Gion observed that “Economic growth of over 4 per cent, falling government debt, budget discipline and limited inflation – of under 3 per cent – is an incredibly rare combination.” He added that “Come what may, the Government is intent on maintaining this equilibrium situation – even if credit rating analysts expect a faster reduction of government debt.”
He said that credit rating analysts have also recognized the transparency and reliability of Hungary’s economic indicators. Although since 2012 the budget deficit has continuously deviated from the envisaged figure, the fact that this has only been to a small degree – an average of only 0.3 per cent – attests not only to discipline in implementing the budget, but also to the appropriateness of budgetary planning.
(Ministry of Finance/MTI)