IMF bumps up its projection for Hungary’s economic growth

The IMF has bumped up its projection for Hungary’s economic growth in 2022 to 5.7%, among the highest in the region.

Finance Minister Mihály Varga said the International Monetary Fund (IMF) has bumped up its projection for Hungary’s economic growth in 2022 to 5.7 percent, among the highest in the region.

Minister  Varga, attending the annual meeting of the World Bank and IMF in Washington, DC, said the current period was very different compared with 2008 when the government looked to the IMF for solutions to problems. Since 2010, Hungary has provided various exemplary responses to economic policy questions, such as a flat-rate personal income tax, the early repayment of forex loans and the introduction of crisis taxes — initially heavily criticised, he noted — but even the IMF now acknowledges the success of Hungarian policymaking centred round a labour-based economy, he added. Over the past 10 years, the IMF has gradually come around to the approach that during a crisis, economic stimulus and support for families can bring faster and better results than austerity, he said. The IMF expressly supported this approach during the pandemic, he said, adding that this is an important change of approach. Varga acted as deputy chairman at a plenary meeting of the International Monetary and Financial Committee, representing a group of countries which includes Austria, Czechia, Slovakia, Slovenia, as well as Belgium, Luxembourg and Turkey, the ministry said. Commenting on the effects of the Russia-Ukraine war, Varga said the European economy had been hit hard and the damage would be difficult to reverse. “The sanctions-fuelled energy crisis poses extraordinary costs on individual countries, and our group, therefore, considers it extremely important to boost energy security and support the changeover to renewable energy,” he added.