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EU recognizes favourable growth forecasts

February 28th, 2014

Commenting on recent statistics, a pro-government economist contends that PM Orbán has been successful in consolidating the Hungarian economy. The leading left-wing daily cites data from the building industry to underpin its view that the government’s policies have mostly failed.

In Magyar Nemzet (print edition), Magdolna Csáth quotes several indicators which suggest that the Hungarian economy is in better shape than the European average. Hungary’s expected growth rate (2.8 per cent) exceeds the EU-28 average (1 per cent), while inflation, the public deficit and unemployment are all below the EU average. Csáth believes that the government’s attempt to consolidate the economy without resorting to austerity measures has proved successful. Sustained growth, however, requires an increase in domestic demand, which can be achieved through further energy tariff cuts and additional wage hikes, Csáth contends.

Népszabadság believes, on the other hand, that although the recent favourable growth indicators have been acknowledged by the European Commission, disappointing construction data show that the Hungarian economy has still not stabilized. An editorial on the front page suggests that housing statistics, at just over 7 thousand new homes built in 2013, is the worst score for a hundred years. (The decline represents 30 per cent year on year. Since 2008, the total decline in home building is close to 80 per cent. Households have been busy repaying their mortgages since the outbreak of the financial crisis in 2009.) Although economic output appeared to gather momentum in 2013, Népszabadság interprets the decline in construction as an indication that households and investors have no faith in the economy.

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