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Varga: GDP could shrink by 5%

The economy picked up slightly in June, but GDP may still decline by 10% year-on-year in the second quarter and shrink by 5% in the second half of the year, exceeding the previously expected, now optimistic 3% forecast, Minister of Finance Mihály Varga told Kossuth Rádió this week.

File photo: Hungarian Minister of Finance Mihály Varga at an Economic and Financial (ECOFIN) Affairs Council meeting in Brussels, Belgium on February 11, 2019. Photo by Alexandros Michailidis / Shutterstock.com

Varga said that the biggest annual decline was measured in April, when the decrease was 20%. The economic slowdown diminished in May, as the trend reversed at the end of the month, and there were already signs of a slight recovery in June.

The minister added that this year, a general government deficit of 1%, HUF 488 billion, had originally been projected as a share of GDP, but by the end of the first half of the year, with a wide-ranging economic protection plan and stimulus package in place, a deficit of 3.8-4%, more than HUF 1.8 trillion, had already developed.