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Economy ministry replies to The Economist with own assessment

History

Hungary's National Economy Ministry has responded to a piece published in UK business weekly The Economist calling the country "the worst performer in Central Europe" with its own assessment of the situation.

In a letter to the weekly published on the government website on Tuesday, the ministry called Hungary "one of the looming success stories of the emerging new European Rim called Central-Europe".

The Economist piece said the report card for Hungary's government, halfway through its term, makes "grim reading" in light of high unemployment, high inflation and a weak economy, citing fresh data that show GDP contracted year-on-year in Q1.

In its letter, the ministry conceded the Q1 GDP data were "disappointing" but stressed that long-term estimates could not be made on the basis of single quarter. Hungary's GDP growth in Q4 2011 was better than expected and "one can expect further stabilisation" in the second half of the 2012 as well as a return to growth in 2013, it said.

The ministry said Hungary's employment rate had risen by 1.2 percentage points between the time the government took power and the end of 2011, the latest period for which comparative data are available.

It also said that prudent fiscal policy and "prompt measures of the government" resulted in a marked improvement of Hungary's general government balance as a percentage of GDP in 2010 and 2011, and the government expects an "outstandingly positive" 2.5% ratio in 2012.

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