Petschnig: No stable basis for economic growth in Hungary

February 15, 2014


Leading Hungarian economist Maria Zita Petschnig told ATV on Friday there was no “stable basis” for economic growth in Hungary. She was reacting to preliminary figures released Friday showing 2013 fourth quarter GDP growth of 2.7 per cent.  According to Petschnig last year’s GDP growth of 1.1 per cent was only enough to return the economy to its 2005 level.  “In contrast to the other Visegrad countries (Poland, Czech Republic, Slovakia), Hungary has not been able to overcome the economic recession”, adding that Hungary continues to experience the “largest economic contraction within the east-central European region”.

In response to Minister for National Economy Mihaly Varga’s claim that 2013 fourth quarter GDP figures constituted a “trend reversal” Petschnig said “if growth is based on unknown factors (like future agricultural output) then we cannot speak of a stable ‘trend reversal’”.

On the subject of the government sponsored program of football stadium construction, she pointed out that, while this momentarily inflates investment and building sector figures, in the long run the stadiums will contribute little, if anything, to GDP growth.

Petschnig pointed out that while export oriented industries have experienced an increase in demand for their products, small and medium size businesses oriented on the domestic market continue to experience a decrease in demand for their products.

Petschnig said household consumption was likely to increase in 2014, and points out that Fidesz has perfectly timed increases in salaries to police officers and military officials who are to receive three months’ worth of additional salary on April 1, just five days before the election.

Referenced in this article:

Petschnig Maria Zita,; 2014 February 14.