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Hungarian economy seen as relatively resilient

October 27th, 2020

An independent economist points out that the first wave of the coronavirus pandemic had a deeper negative impact on other EU economies than on Hungary.

On Portfolio, Attila Weinhardt contends that the economic implications of the coronavirus have been milder in Hungary than in most EU countries. In Weinhardt’s calculation, Hungary’s GDP could have shrunk by 6 to 20 per cent in the first half of 2020 without the government’s measures to dampen the effects of the coronavirus slowdown. But even without government interference, Weinhardt adds, the impact would have been smaller than that experienced by most EU member states. He thinks that the Hungarian economy has proven relatively resilient due to high internet penetration, which made home-office widely available, as well as to advanced digitalization in public services that made smooth operation possible for the authorities during the lockdowns introduced in the spring. Weinhardt also mentions internal tourism as the second main factor that helped bolster the economy. Hungarians spent their holidays in their own country, which at least partly compensated for the absence of foreign tourists. As for the second wave of the pandemic, Weinhardt thinks that the biggest challenge for Hungary will be the scarcity of medical personnel and hospital beds.

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