The OECD forecast for Hungary is not too bright

The OECD lowered its forecast of Hungary’s GDP in 2023 to 0.0 percent in its biannual Economic Outlook published on Wednesday.

The forecast was lowered from 1.5 percent in November.

“High inflation is eroding household purchasing power and consumption, while tight financial conditions and economic uncertainty are holding back investment,” the OECD said.

The OECD has put average annual inflation at 19.2 percent for 2023. It projected investment volume would contract by 3.5 percent.

Szijjártó asks OECD to act on Ukraine’s blacklisting of OTP Bank

The Hungarian government requests that the OECD take action to ensure that Ukraine removes Hungary’s OTP Bank from its list of international sponsors of war, Foreign Minister Péter Szijjártó said in Paris on Wednesday.

The war in Ukraine is having an “absolutely serious” impact in neighbouring countries, Szijjártó told an OECD ministerial council meeting, according to a ministry statement, adding that Hungarians were also dying in the fighting.

Hungary therefore has a vested interest in the war ending as soon as possible, he said.

Szijjártó said Hungary was undertaking the largest humanitarian aid operation in its history in connection with the war, with over one million refugees having entered the country and around 1,300 schools having welcomed refugee children.

The Hungarian government backs the OECD’s support schemes in Ukraine, supports the reconstruction of hospitals and schools and contributes financially to the operation of key institutions on a bilateral basis, he added.

“Although, we must be aware that every day spent with war increases the suffering of the people, and brings an unknown number of additional casualties and huge additional costs when it comes to reconstruction efforts in future,” Szijjártó said.

He noted that the Ukrainian authorities had added OTP Bank, Hungary’s biggest commercial lender with a 30 percent market share, to their list of international sponsors of war.

This is “absolutely unfair” and “has nothing to do with reality”, Szijjártó said, adding that OTP had “not violated any regulations either in Ukraine or internationally”.

The minister asked the OECD to intervene with a view to getting Ukraine to remove OTP from the list.

He warned that keeping the bank on the list would raise “obstacles and challenges” to continued enhanced cooperation with Ukraine.