Mihály Varga and Pierre Moscovici discussed the EU country report on Hungary, on the sidelines of the regular spring meeting of the IMF held at the institution’s Washington headquarters.

The Minister for National Economy stressed that the Government disputes the tendentious view that the Commission adopts on the Hungarian economy in its upcoming country report. During the talks, Mihály Varga highlighted the fact that the achievements reached by the Hungarian economy in recent years cannot be left unobserved, as economic expansion has been the result of steady trends and not only one-off factors. Therefore, he added, the Government is expecting the Commission to take Hungary’s achievements properly into account and express these conclusions in the country-specific recommendations scheduled to be published in mid-May.

Hungary’s recent fiscal and macro-economic data have repeatedly positively surprised officials and market analysts, he pointed out. The general government budget deficit has been below the 3 percent threshold for years and general government debt has been on a declining path since 2012. The share of forex debt within the total amount of government debt has also been falling, alleviating financing risks. The forint conversion of typically Swiss franc-denominated household mortgages does not only safeguard the positive effect of bank refunds, but it actually shielded households and the bank sector from incurring even more massive financial costs in January 2015, when the Swiss franc peg was abandoned.

Hungary is the country with the second largest GDP growth figure within the European Union. The accelerating economy has been generating more jobs and reducing the unemployment rate: in this regard, Hungary has also been among the top performers of the EU. The Minister also emphasised that the Government signed an MoU with the EBRD and Erste Bank, that opens a new chapter in the relations between the financial sector and the Government. The agreement is also expected to give a further boost the Hungarian economy through the lowering of the bank tax and the bolstering of lending, Mihály Varga said.

In addition, the Minister participated at the general meetings of the IMF and the World Bank, held talks with World Bank Executive Director for Hungary Franciscus Godts, IMF Mission Chief Costas Christou, Karin Finkelston, Vice President for Global Partnerships at IFC, a member of the World Bank Group, as well as with representatives of Moody’s Financial Services.

(Ministry for National Economy)