Dec 28, 2019 - Zoltán Kovács

2019 Year In Review: Let’s talk about the economy

With the end of the year just around the corner, it’s time to look back at what we achieved in 2019. Over the last year, Hungary’s economic performance surpassed even optimistic expectations. Here’s a brief review.

While the winds of a global economic slowdown can already be felt, the Hungarian economy shows no sign of recession. The Hungarian Government’s policies have reinforced the country’s economy and – despite global headwinds indicating otherwise – we can expect further growth.

But don’t take my word for it. You can see for yourself in About Hungary’s economic news coverage that 2019 has been the year of “raising projections.” Most major international bodies monitoring and forecasting economic performance (including the European Commission, IMF, Fitch, OECD and more) have bumped up their GDP growth predictions for Hungary at least once. Last year, Hungary’s economy grew by 5.1 percent, significantly higher than the earlier predictions of a 4.3 percent expansion.

According to reports released a few weeks ago by Hungary’s Central Statistical Office (KSH), the country’s economy is expected to grow by 4.8 percent in 2019. This would mean that – once again – Hungary will meet its well-established economic policy goal, put forward by Prime Minister Orbán in recent years, of achieving a level of economic growth that is at least 2 percent above the EU average.

What’s more, not only does Hungarian economic performance beat the EU average, it far surpassed Q2 2019 rates for other neighboring countries: Romania (4.4 percent), Slovakia (1.9 percent) and Czech Republic (2.7 percent).

Of course, GDP growth is not the only indicator of an upbeat economy. Other numbers point in a similarly optimistic direction.

In 2019, the indebtedness of the Hungarians and Hungarian businesses remained low. The Hungarian banking system remained resilient to shocks, and Hungary's public debt dropped well below 70 percent of GDP to an eleven-year low. Meanwhile, since 2010, net wages in Hungary have grown by an accumulated 85 percent, and the gross wage increase between 2010 and 2018 was the biggest among the V4 states. Hungary outperformed not only the EU average, it towered over its neighbors, too.

Besides the Hungarian people, investors also enjoy the benefits of an upbeat economy, and Hungary’s investment volume rose by an annual 14.8 percent in the third quarter of this year. This means that, in absolute terms, Hungary welcomed investments worth HUF 2.7 trillion (EUR 8.2 bn) in that period.

While the numbers keep on rising, signs point to a global economic slowdown. Thinking ahead and preparing Hungary’s economy to sustain its growth even in a less favorable international setting, Prime Minister Orbán announced in May the government’s 13+1-point Economy Protection Action Plan, a comprehensive policy package aimed at securing a healthy GDP growth rate over the long run. A second phase of the economic action plan is expected in 2020.

Here’s to a prosperous 2020!

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