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Hungary: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Hungary
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2019: Issue 357
Language:
English
Publication Date:
05 Dec 2019
DOI:
https://doi.org/10.5089/9781513521404.002
ISBN:
9781513521404
ISSN:
1934-7685
Pages:
54
Keywords:
ISCR; CR; headline inflation; MNB; rate; holding; tolerance band; liability positions vis-à-vis nonresident; monetary policy stance; loan product; exchange rate arrangement; Inflation; Labor markets; Global; Europe
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This 2019 Article IV Consultation discusses that in an increasingly uncertain global economic environment, Hungary’s growth registered one of the highest rates in Europe in 2018. The economy now appears to be running above capacity and wages are growing rapidly amid historically low unemployment. It is thus likely that growth will slow down over the medium term. Supply-side reforms can help sustain the momentum. Policies have reduced vulnerabilities substantially; however, measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy manoeuvre is rebuilt. Wages outstripping labor productivity growth, slower export growth, and shortcomings in the business environment for small and medium enterprises call for invigorating structural reform efforts. Improvements in competitiveness are needed to sustain rapid income convergence and address demographic challenges. The government’s competitiveness program contains important elements. Focus should be on improving the business environment, enhancing the legal and regulatory framework, and increasing labor force participation.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund