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Prospects of economic recovery

August 10th, 2020

Economists across the political spectrum ponder the chances of a rapid economic recovery after the coronavirus pandemic.

In Heti Világgazdaság, György Iványi predicts a faster economic recovery after the coronavirus pandemic than expected by most analysts including the EU and World Bank. The liberal economist acknowledges that the epidemic and the ensuing lockdown have had devastating economic consequences. He points out, nevertheless, that the bulk of the economic infrastructure was not impacted by the crisis. While the pace of slowdown in production nears wartime records, factories, roads and other elements of infrastructure are intact, and therefore production can resume rapidly once the health crisis is over. In an aside, Iványi adds that calls for major reforms and the introduction of more robust social welfare provisions imperil fast recovery.

Népszava’s Miklós Bonta cautions against hopes of a speedy economic recovery. The left-wing columnist acknowledges that recent data according to which industrial production is down only 12 per cent year on year is better than most analysts expected. Bonta believes that the pace of the decline of industrial production has not been as tragic as many assumed, only because companies were willing to take risks and fund losses rather than dismiss workers and suspend production. But he suspects that they will not finance unprofitable production for long, particularly in an automotive industry which is facing difficulties throughout the world.

In Magyar Hírlap, Gábor Putsay finds it promising that the unemployment rate has been on the decline for seven weeks. The conservative commentator attributes this to the government’s economic emergency measures, that help companies keep their workers. Putsay adds that Hungary’s resilience is due to the government’s successful efforts to stabilize the economy since 2010. He welcomes the government’s plans to increase infrastructural investment. This, Putsay believes, will not only boost the economy and create even more jobs but will also improve the conditions of everyday life for the population.

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