IMF statement praises Hungary’s pandemic response and recovery measures

Significant policy support, a successful vaccination campaign, a trade recovery, and the disbursement of EU funds will greatly contribute to Hungary’s economic rebound, according to the IMF.

The International Monetary Fund published its concluding statement on Hungary on Monday, following its virtual meetings between April 20 and April 30, 2021. Present at the meetings were State Secretaries Péter Banai and Gábor Gion; Deputy MNB Governors Dr. Csaba Kandrács, Mihály Patai and Barnabás Virág; and various other government officials, as well as representatives from banks, business chambers, unions, and academia.

“Hungary’s economy entered the COVID-19 pandemic on a strong footing,” and authorities’ policy response to the resulting crisis was “large and timely,” the statement underlines.

Thanks to a loan moratorium, tax benefits, newly restructured spending focused on medical supplies, wage increases for healthcare staff, and wage and investment support, as well as incoming EU funds, Hungary’s economy is set to recover with expected growth exceeding 4 percent in 2021.

The IMF also deemed Hungary’s monetary policy during the crisis as appropriate and the National Bank’s response to market pressures as timely, acknowledging its prudent micro and macro measures to address the economic impacts of the pandemic.

It further praised Hungary’s vaccination program, stating it may allow Hungary to reopen earlier than most other EU countries.

Additionally, the IMF welcomes the Hungarian government’s efforts to improve competitiveness and attract foreign investment as well as its recent actions aimed at enhancing SMEs’ productivity. Finally, the International Monetary Fund recognized the commitment by Hungarian authorities to greening the economy.

The IMF called for continued, well-targeted fiscal support, the timely implementation of the EU’s recovery and resilience funds, and improved competitiveness; it also suggested that monetary policy should be prepared for inflationary pressures.