The Economist: Premature to describe Hungary’s economy as “wonderbread”

July 24, 2015

Beddoes

The Economist Editor-In-Chief Zanny Minton Beddoes took questions live on the publication’s Facebook page Thursday evening. This wouldn’t typically be news for Hungary, but given National Bank governor György Matolcsy’s recent criticism of The Economist for not publishing economic news about Hungary, Beacon correspondent Ben Novak used the opportunity to find out why the weekly publication has failed to mention Hungary’s relatively strong GDP growth figures of late.

Novak: “Hungary’s c(entral) bank governor says The Economist is deliberately shunning successes of the Orbán regime’s unorthodox economic policies. Are you really shunning its successes, or is this just a ruse to generate demand for the entire edition of The Economist you plan on dedicating to the economic wonderbread that is Orbánomics?”

Beddoes: “Hungary’s economy is indeed doing well. It was the fastest-growing in central Europe in 2014, with inflation and unemployment down. The unorthodox restructuring of hard-currency loans into forints did not damage the banking system or investor confidence in the way that prime-minister Victor (sic) Orban’s critics had forecast. That said, it would be premature to describe this as “wonderbread”. Hungary is doing well mainly because of its cost advantages and the strength of the German economy, which is powering growth all over central Europe. The real question for Hungary, as with all the ex-communist economies, is whether it can make the transition from being a low-wage, low-productivity part of other countries’ supply chains to being a real economic power-house, with high-value-added industries, strong indigenous research and development, and so on. For this Hungary will need to build excellent public services and strong institutions.

So we are not ignoring Hungary’s success, but we have room only for a selection of political and economic news from the 50-odd countries covered by the Europe section. Hungary as a small economy with a 10m population will necessarily struggle for coverage against big economies, and bad news from elsewhere. Our Europe coverage has been particularly skewed in recent months because of the crisis in the eurozone. Hungarians may be sorry not to be written about more in The Economist, but they should perhaps be glad that their problems aren’t bad enough to merit coverage of the kind that Greece is attracting.”