MNB Urges Steps to Improve Competitiveness 

MNB

Photo by Jessica Fejos

The National Bank of Hungary (MNB) pointed to a decline in Hungary's competitiveness compared to other European Union member states and urged an economic shift from quantity to quality in an annual Competitiveness Report published on Thursday. 

Hungary dropped two spots to 19th in a gauge of competitiveness in the EUR-27 compiled by MNB, the central bank noted. Hungary scored 46.6 points in the ranking, under the 51.4-point EU average, it added.

To continue the past decade of sustainable convergence and achieve the EU's average level of development will require a recovery of balances "as soon as possible" and a "full turnaround" in terms of competitiveness, MNB said.

"A switchover of the Hungarian economy from a growth model based on quantity to one based on quality is indispensable for that competitiveness turnaround and for sustainable convergence, but will require far-reaching structural reforms," it added.

In a presentation of the report, Zsolt Kuti, an MNB director said Hungary could choose between two models of convergence, one a model for growth focused on incentives to drive demand, and the other a supply-side-based model that strengthens competitiveness and stability. 

He acknowledged that improving competitiveness was a "bumpy road" that required measures to reach critical mass, but said it was the "right path".

To achieve sustained and sustainable convergence, Hungary's growth model needs to switch to a knowledge- and technology-driven one that weighs environmental factors, too, he added.

He said Hungary could tap "significant growth reserves" by reducing energy dependence and boosting renewables uses, increasing credit penetration, deepening digitalization, raising the share of exporting SMEs and increasing value added, while cutting the number of early school leavers and lowering the number of avoidable deaths by raising spending on healthcare.

Farmgate Prices Fall 25.4% in February Crops

Farmgate Prices Fall 25.4% in February

Hungary in Talks on Attracting More Chinese Investments - Sz... Int’l Relations

Hungary in Talks on Attracting More Chinese Investments - Sz...

Close to 2,500 Companies Apply for EV Subsidies Automotive

Close to 2,500 Companies Apply for EV Subsidies

Chresten Bruun Wins Expat CEO of the Year Award Awards

Chresten Bruun Wins Expat CEO of the Year Award

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.