Hungary should further develop its growth model in order to remain on a sustainable path of catching up with more established EU states in the long term, at a time when "the change in the global economic climate" requires new responses, György Matolcsy, governor of the National Bank of Hungary (MNB), said at an annual meeting of Hungarian economists.
Addressing the annual meeting of economists, Matolcsy praised as of historic importance the 2013-2019 period when Hungaryʼs economy expanded at an average annual rate in excess of 3.5%, adding that the country should continue to grow 2 percentage points faster than Western Europe, according to multiple news reports.
It is questionable, however, whether the recent performance will be sufficient within the economic climate change of the next few years, Matolcsy stressed. In addition to improving competitiveness, he added, Hungary will need a general economic stimulus program.
Matolcsy listed 13 dangers threatening European growth and, as a result, the Hungarian process of catching up.
Among the dangers he mentioned were the threat of a hard Brexit, the slowdown and problems of the German economy, which are usually felt in the Hungarian economy after a 6-9-month delay, and the U.S.-Chinese trade dispute which could put the results of Hungary’s "Eastern Opening" policy at risk.
The governor added that the Hungarian economy must step forward in four fields. He emphasized the importance of the competitiveness turnaround program recently proposed by the MNB; a new program that is necessary to improve general economic activity; the reinforcement of specific industries; and at the same time, the maintenance of favorable labor market conditions.
Matolcsy cited as a cause for worry that the room for maneuver of the European Central Bank (ECB) has narrowed, stating that today the eurozone is able to use fiscal and monetary policy tools to an extent less than necessary in a potential crisis situation.