The Hungarian economy must learn the fine art of overtaking in corners in the race to remain economically competitive, Central Bank Governor György Matolcsy writes in the latest in a series of influential articles on business portal novekedes.hu.
By 2010, the Hungarian economy was in such a deplorable state that it could barely have entered a demolition derby, let alone seriously compete in a serious race in international economics.
While still being a force to remain in the race, in the 2010-2012 period, the major parts of the car have been replaced with stock items. In what economic history will remember as an impossible feat of achieving growth and stability instead of the conventional wisdom of growth or stability, Hungary managed to overcome its pitiful situation.
Between 2013 and 2019, the Hungarian economy again reached a level of fitness suitable for regional or even international races.
Growth rates are consistently 3 percent above the European Union average and the country has again taken the lead in the region from Poland.
The year 2020, however, has brought about a radical change in racing conditions. The race ahead is an uphill one, in stormy weather, where a single mistake can have dire consequences. But overtaking is possible even under these conditions, provided that we learn the science of cornering and the art of overtaking in corners.
The rules are the following:
1) Only an economy in good shape can negotiate the corners without stalling or slipping out. The Hungarian economy has that.
2) We must prepare for overtaking long before the corner, arrive there at a suitable speed and pass those less prepared.
3) Before the corner, we must know our strong and weak points, to be able to change tactics at a moment’s notice.
4) The strengths of the Hungarian economy – political stability, large-scale job creation, remaining attractive to investments and favorable business taxes – must be further improved.
5) The weaknesses of the Hungarian economy – competitiveness, duality, healthcare, demographics, most of higher education, housing policies, capital balance – must be gradually reduced.
6) Mistakes or excessive risks are not allowed.
Title image: Hungarian Central Bank Governor György Matolcsy (Magyar Hírlap/Pézter Papajcsik)