According to Kovács, the government deficit is low and the debt burden from interest rates has decreased due to the joint efforts of the government and the National Bank of Hungary (MNB).
The low inflation environment makes it possible for the MNB to lower its base rate further and to have a loose monetary policy.
Kovács noted that there is little appetite among companies for credit. Companies are not even willing to take low risks and this is impeding economic growth.
According to Kovács, the MNB has calculated that corporate lending would need to expand by 5-10%, or around HUF 250-400 billion annually, but this is a long stretch because of restricted demand.
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