Public deficit at 9 percent seen as the lesser evil
January 30th, 2021A pro-government commentator concedes that last year’s public deficit was extremely high, but in the midst of the pandemic, the government had no other sensible option than to help businesses keep afloat.
In Magyar Hírlap, Csaba Szajlai believes pumping money into the economy was the lesser evil last year, when the pandemic brought much of the economy to a halt. The government is disbursing direct help to entrepreneurs by partly financing their wage expenses, as well as various forms of export subsidies and credit relief. At a time when government expenditures rise and incomes fall, public deficit is unavoidable, he explains. Meanwhile, Hungary’s sovereign debt rose to 82 per cent of GDP last year from 67 per cent a year before. Szajlai calls that regrettable but relatively moderate, as the European Union average is 90 per cent of GDP. Hungary now hopes to get the pandemic gradually under control this year, which may result in modest growth. And, ‘if there is growth, everything becomes possible’, he writes, hoping that Hungary will start ‘outgrowing’ both the deficit and its sovereign debt in the years ahead.