Central bank, govt advance in strategic alliance, in spite of differences

National Bank of Hungary (NBH) governor György Matolcsy acknowledged differences between the central bank and the government over some issues, but said the sides continue to work together in a close strategic alliance at a press conference following a monthly policy meeting on Tuesday.

The National Bank of Hungary has until now planned its operation in very close cooperation together with the government and will do so in future, too, Matolcsy said.

“A very close strategic alliance has been formed between the government and the central bank … Both sides see this to be of great value,” he said.

Matolcsy said there could be differences in the assessment of economic trends in Hungary, adding, at the same time, that

there was no disagreement that the central bank and the government move forward in a strategic alliance.

On Monday, Matolcsy warned that government overspending in 2022 could fuel inflation in a column published in national daily Magyar Nemzet.

Matolcsy wrote that he believes the 5.9 percent-of-GDP budget deficit target in the 2022 budget is “a mistake” and could set the country up for “persistently high inflation”.