Matolcsy Calls for Turnaround of Economic Policy

Photo by István Derencsényi / MTI

National Bank of Hungary (MNB) governor György Matolcsy called for a complete turnaround in Hungary's economic policy at the 62nd Itinerant Conference of Economists in Nyíregyháza (240 km northeast of Budapest) last week.

He argued that a loss of policy direction between 2021 and 2024 has undermined the achievements of the 2010s and jeopardized the attainment of the goals set for the period up to 2030.

Hungary has two dangerous adversaries, Matolcsy said: high and costly indebtedness and high and stubborn inflation, he noted.

Matolcsy said there had been a wrong turn in economic policy; the government failed to control the budget deficit and did not join the central bank in the fight against inflation for one and a half to two years.

Matolcsy said that because of inflation, a significant number of households and businesses suffered such a loss of wealth that “victims of the inflationary shock” arrived: those who did not consume and those who lost half of their reserves.

This meant the expenses of the state budget increased, and its revenues decreased, he added.

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