Dispute over Hungary’s economic outlook

A left-wing commentator fears that the government’s spending policies will further fuel already rampant inflation. A pro-government analyst quotes two independent analyses to justify his confidence that Hungarian growth will skyrocket.

According to the latest report of the Central Statistical Office, year-on-year inflation rate hit 7.4 per cent in November, a 14-year high.

In Népszava, Miklós Bonta thinks that inflation may get out of hand. The left-wing economist believes that the government’s spending projects, announced just months before the election, and which include a rebate of some personal income tax from 2021, an increase in the minimal wage and the reintroduction of the 13^th month pension, will speed up inflation even more. Bonta adds that the labour shortage is another important factor that will inevitably fuel high inflation rather than dampen it down.

Magyar Nemzet’s Csaba Szajlai, on the other hand, believes that the Hungarian economy is on the right path. The conservative analyst recalls that the OECD in its recent report projects 6.9 per cent GDP growth for 2021, and 5 per cent for next year. Another analysis, published by Allianz Research, claims that Hungarian growth has been set back less than other European economies, so Hungary will reach the growth level of the most advanced countries by 2027. Szajlai sees these independent reports made by foreign experts as another acknowledgement of the success and efficiency of the Hungarian government and the National Bank.

Tags: economy, GDP, growth, inflation, National Bank