Hungary: Selected Issues

IMF Staff Country Reports, May 12, 2017

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Hungary: Selected Issues

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Bibliographic details

• Published: May 12, 2017
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484300473.002

Summary of paper

• Title: Hungary: Selected Issues
• Publication date: May 12, 2017
• Series: Country Report No. 2017/124
• Issue: 124
• Pages: 46
• Volume: 2017
• DOI: https://doi.org/10.5089/9781484300473.002
• Stock No: 1HUNEA2017002
• ISBN: 9781484300473
• ISSN: 1934-7685
• Subjects: Bank credit, Banking, Credit, Financial crises, Global financial crisis of 2008-2009, Money, Revenue administration, Tax return filing compliance
• Keywords: bank, Bank credit, CR, Credit, Europe, Global, Global financial crisis of 2008-2009, grey economy, ISCR, PWS contract, PWS participant, PWS program, PWS wage, PWS worker, Tax return filing compliance, wage, worker

Major findings and characterization of the post-crisis period

• The paper reviews the relationship between real GDP growth and domestic bank lending to the private sector in Hungary after the global financial crisis.
• The analysis draws on a cross-country analysis of European countries.
• The recessions that followed the crisis were deeper and lasted longer than the average recession.
• Hungary experienced a creditless recovery, similar to some other countries.
• Lending by Hungarian banks to the private sector finally seems to be picking up.

Core analytical conclusions

• Both credit demand and credit supply were hurt by the crisis.
• Key factors influencing credit developments include:
  • loan quality
  • deposit funding
  • bank capital
  • the macroeconomic environment

Implicit policy-relevant implications (as reflected in the analysis)

• Addressing loan quality, deposit funding, and bank capital is central to restoring robust private-sector lending.
• Improving the macroeconomic environment supports the recovery of credit supply and demand.
• Monitoring and supporting the nascent pick-up in lending by Hungarian banks is important for sustaining the recovery.

International Monetary Fund. European Dept. "Hungary: Selected Issues", IMF Staff Country Reports 2017, 124 (2017).

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