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Regional inequality growing

August 25th, 2017

A conservative economist points to the vast regional differences behind Hungary’s fast overall economic growth. Poorer parts of the country see little of the booming economy.

In Magyar Nemzet, Magdolna Csath calls for new government programs to facilitate economic growth in laggard regions in Hungary. The conservative economist recalls that although macroeconomic data are promising and growth is fast (see BudaPost August 18), poorer regions do not contribute much to growth – nor do they share its benefits. Csath points out that in the poor eastern and southern regions, unemployment is higher and the rate of investment is much lower than the national average. The main reason for such disparity is the dominance of car factories that invest in the more developed and prosperous counties. Csath suggests that the government should target small and medium-sized companies and offer them more funds, otherwise regional inequality is likely to grow further.