Hungary: Expenditure cuts needed

For 2006, real GDP is set to grow at a rate near its trend of about 4%. However, weakening domestic demand, due to tight austerity measures, is projected to slow growth in both 2007 and 2008, despite exports continuing to expand strongly.
Given the alarming fiscal imbalance (this year the general government deficit is likely to be over 10% of GDP), the announced frontloading of an austerity package with revenue increases is probably unavoidable. However, for consolidation to break with the Hungarian habit of missing fiscal targets, permanent expenditure cuts linked to structural reforms are needed.
Population (000s), 200510 087
Area (000 sq km)93
CurrencyForint
GDP (Billion USD), 2005173.3
Life expectancy at birth (Women, Men), 2004 76.9, 68.6
Total labour force (000s), 20054 205
Government typeParliamentary Democracy
Indicators% change unless otherwise indicated
200620072008
GDP growth4.02.23.0
Consumer price index3.96.74.1
Unemployment rate (%)7.57.77.6
General government financial balance
(% GDP)
-10.1-6.9-5.7
Current account balance (% GDP)-7.3-6.3-5.6
Source: OECD©OECD Observer No. 258/259, December 2006


Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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