Varga Responds to Matolcsy's Criticism of Economic Policy

Government

Mihály Varga

Image by Alexandros Michailidis / Shutterstock.com

Finance Minister Mihály Varga acknowledged the truth in remarks made by National Bank of Hungary (MNB) governor György Matolcsy concerning the economy on earlier this week, but noted that high energy prices are impacting all of Europe, according to a report by state news wire MTI.

"The central bank governor is right that there is trouble, but that trouble is impacting everybody: high energy prices are dragging economies toward recession in all of Europe," Varga wrote in a post on Facebook.

"All countries have been forced to take steps, Hungary, too," he added.

He noted that as a result of the government's crisis-management measures, Hungary's GDP growth reached 4.1% in the third quarter, the seventh-highest rate in the European Union, while the jobless rate remains under 4%.

"We can build on the results of the past years," he added.

In a hearing before parliament's economy committee on Monday, Matolcsy faulted the government's economic policy, in part, for the country's vulnerable position at present.

According to a report by international news wire Reuters, Matolcsy told a parliamentary committee that "all price caps should be phased out immediately", while also slamming the government's expansionary fiscal policy in 2021, which he said had exacerbated inflationary pressures.

Matolcsy told the committee that annual inflation, which stood at 21.1% in October according to the Central Statistical Office (KSH), was now largely driven by a surge in food prices, which was due to low productivity and monopolies in the Hungarian food sector and a high share of imports.

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