Hungarian central bank governor calls for economic policy turnaround
Central bank governor György Matolcsy called for a complete turnaround in Hungary’s economic policy at the 62nd Itinerant Conference of Economists in Nyíregyháza (NE Hungary) on Thursday.
He argued that a loss of economic policy direction between 2021 and 2024 has undermined the achievements of the 2010s and jeopardised attainment of the goals set for the period up to 2030.
Central bank governor: Hungary has two adversaries
Governor of Hungarian central bank György Matolcsy. Photo: MTI/Derencsényi István
Hungary has two dangerous adversaries, Mr Matolcsy said, high and costly indebtedness and high and stubborn inflation.
Mr 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.
Mr Matolcsy said because of inflation a significant number of households and businesses suffered such a loss of wealth that “victims of the inflationary shock” have arrived: those who do not consume and those who have lost half of their reserves.
The expenses of the state budget this way increased and its revenues decreased, he added. He said it is a faulty economic policy to claim that real wage growth will automatically lead to consumption.
Real wages cover only half of incomes, the real value of pensions and social expenses did not increase, he noted.
The central bank governor said we have moved from a nearly balanced budget to a permanently high deficit, and it is unacceptable and life-threatening to carry such a deficit through the decade.
Mr Matolcsy said a green re-industrialization is needed and a new service sector because it helps to balance the current account.
Forint eases to euro on interbank forex market
The forint traded at 393.20 to the euro around 5:30 in the evening on Thursday, slightly down from 393.11 late Wednesday.
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2 Comments
The Real Person!
The Real Person!
He is right about a few things but the bigger truth is that central banks need to be abolished, together with fiat currency. Let’s return to the gold standard and pull the rug from underneath the despicable bankers, speculators, credit raters, etc.
The Real Person!
The Real Person!
This adds to the opinion, the FACT – that the Minister of Finance of the Orban- Fidesz Government of Hungary – Mihaly Varga, his Financial and Economic Policies, “counter-signed” by the present Prime Minister of Hungary – Victor Mihaly. Orban – have le us to the CHAOS that we as a country are placed at this point in time.
Varga and Orban – they were WARNED – warned and warned – they, the path – the Economic and Financial policies they set us Hungary as a country on – HAD horrendous RISK factors associated to them.
Throughout this WRONGFUL and destructive path – the Varga & Orban “road to hell” – the economic & financial functionality in Hungary, the WARNINGS or “Conflict of Opinions” with the Governor of the Hungarian Central Bank – Gyorgy Matolcsy – it is KNOWN that relationship(s) with Varga & Orban have been “extremely” – RESTLESS through non-agreement of the Varga & Orban “hell road” path – there economic & financial policies.
Mihaly Varga – continues to exhibit his “deepening” FAILURES as the Finance Minister of Hungary.
Varga has SMASHED – our Economic and Financial “structure” as a country, that our RECOVERY – our FUTURE – the NEED – as is the subject of this article – the “economic policy turnaround” ” – what a DAUNTING task we Hungary are factually FACED with.