Matolcsy again argues for reining in budget deficit

Debt

György Matolcsy

National Bank of Hungary (MNB) governor György Matolcsy reiterated and refined arguments for reining in next year's budget deficit in an op-ed piece published on the website of conservative daily Magyar Nemzet. 

Matolcsy has said several times that the government's 5.9%-of-GDP general government deficit target for next year is too high while stressing that the central bank continues to move forward in a strategic alliance with the government, despite differences on the matter. 

In the piece published yesterday, Matolcsy said the more fiscal resources a state puts toward achieving recovery, the smaller the chance the return to economic growth will be sustainable, and he warned that "tipped balances will force fiscal austerity with time." 

Matolcsy said the faster fiscal balance is achieved, the faster resources outside the budget become available to support sustainable growth. He noted that Hungarians have some HUF 44 bln in financial assets that can be mobilized for the recovery, pointing out that the share of government securities held by domestic retail investors, at close to 25%, is well over the 2% average rate for the region. 

"The lion's share of the financial resources necessary to return to a path of balance and convergence is available in Hungary. Those resources will only become available if we first crack inflation and set the fiscal deficit at around 3-3.4%, and keep it under 3% from 2023," Matolcsy warned.

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.