Photo by Shutterstock/Sercan Erturk
A repeated flare-up of domestic infection rates would justify further social and economic constraints, with significant sacrifices to growth.
In the case of a second wave, external demand would also be weaker, as a result of which the export-driven Hungarian economy would also shift to a lower gear. Exports account for approximately 85% of domestic GDP, while the automotive industry accounts for 16% of total exports.
If the population becomes more cautious and frugal due to fear of the epidemic, then economic activity could reach a lower level. Even if only one or two out of every 10 people would not consume as much, economic performance could already be more subdued.
Although the emergency situation has alleviated, preparations must be made for that possible second wave of the coronavirus epidemic, and to that end Hungary will receive HUF 60 billion in funds to fight the epidemic, Minister of Finance Mihály Varga announced in a video uploaded to his Facebook page after signing an agreement with the Council of Europe Development Bank (CEB).
The minister said the preferential funding source will provide for the purchase of masks, medicines, tests, disinfectants and intensive care beds, among other things. Under the agreement, the CEB will provide EUR 175 million, roughly HUF 60 bln, to cover central budget expenditures related to the epidemic.
Regarding food supply and the agricultural industry, “we are prepared for a possible new wave of the COVID-19 epidemic,” Minister of Agriculture István Nagy told the leading economic daily Világgazdaság (Global Economy). According to the Minister, the tightening of passenger traffic is no longer a problem for foreign seasonal workers, as those who are needed by the sector are already here.
Open to Hungarians
"Hungarian agriculture is still open to Hungarian workers who have lost their jobs," said Nagy, who insisted that Hungary still has a secure workforce, and that farmers who are offering work want to employ Hungarian workers. That perspective is corroborated by the National Chamber of Agriculture (NAK), who said that the entry of workers into the agricultural sector is essentially secured, in a statement to the economic daily.
That should be good news for students, the number of whom are looking for work has tripled compared to last summer, Viktor Virág, a member of the board of the Márton Áron School Cooperative, told novekedes.hu.
There are sectors such as hospitality where the need for student work has drastically decreased as everyone primarily wants to provide what opportunities they can for their full-time employees. Those employees themselves have been feeling more apprehensive about their job security, with about 74% of employed Hungarians in Q2 believing that their job positions are secure at their current employer, which is a 16-percentage point drop compared to the previous quarter, according to a representative survey by insurer BNP Paribas Cardif and polling company Medián.
As a result of downtime due to the coronavirus, both in March and April, manual workers spent twice the amount of time as usual days on leave, according to a separate Trenkwalder report. Trenkwalder saw an average of 92% more leave in March and 108% more in April. During the emergency, companies that shut down due to production chain problems kept significant numbers at home, typically on paid leave in the first few weeks. All of this has resulted in a reduction in annual leave limits, so many workers are able to take less time off than they would originally have planned this summer.
More than two-thirds of the respondents to a survey by OTP Mobil and Groupama Insurance are only preparing for domestic travel, with the most popular destination being Lake Balaton. Over half a million people have traveled to the lake by train in the past month, according to a communication from MÁV Zrt. Some 335,000 people arrived by train on the southern shore and almost 164,000 on the northern shore in the past month.
