Business Chamber Head Urges Cooperation to Bring Down Inflation

Analysis

László Parragh, the head of the Hungarian Chamber of Commerce and Industry (MKIK), pressed for cooperation between the government, the central bank, and economic players to bring down inflation at an economic policy forum on Thursday, according to a report by state news wire MTI.

Parragh said "breaking" inflation calls for a "minimal" sacrifice of economic growth but would require the cooperation of the government, the National Bank of Hungary (MNB) and businesses. Businesses are ready to cooperate, he added.

The chamber head noted that the chamber had earlier pointed to the warning signs of high inflation, such as higher commodities prices, supply-demand mismatches because of the pandemic, the drastic rise in energy prices due to the war, the deteriorating trade balance, higher yields on government securities and the weaker forint.

He said businesses' financial burdens are growing and added that MNB policy is causing banking sector liquidity to narrow.

The delay in transfers of Hungary's European Union funding is "concerning", he said, calling the matter "obvious political blackmail".

Addressing the war in Ukraine, Parragh said peace is in the "fundamental interest" of the Hungarian economy, as the war weighs on economic growth.

He said Hungary's labor market is "extraordinarily tight" and called for adult training schemes to be strengthened.

He said a number of schemes, such as the Széchenyi Card Program, point to the success of the lasting alliance between businesses and the government.

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