Hungary: 2024 Article IV Consultation-Press Release; and Staff Report

IMF Staff Country Reports, August 2, 2024

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Hungary: 2024 Article IV Consultation-Press Release; and Staff Report

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Bibliographic details

• Published: August 2, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400283703.002

Executive summary and context

• The 2024 Article IV Consultation discusses that Hungary is emerging from a period of shocks.
• Key shocks identified: the pandemic, Russia’s war in Ukraine, and crisis-related stimulus.
• These shocks widened fiscal and external imbalances and triggered double-digit inflation in 2022.
• Publication date: August 2, 2024.

Macroeconomic outcomes and outlook

• Inflation:
  • Double-digit inflation occurred in 2022.
  • Thanks to an effective monetary policy response aided by falling commodity prices and a tighter fiscal stance in 2023, inflation came down significantly.
• Labor market and financial sector:
  • The labor market and financial sector remained resilient.
• External and fiscal imbalances:
  • The shocks widened fiscal and external imbalances; addressing these remains a priority.

EU funds and governance issues

• Ongoing negotiations on the super milestones, including the Commission’s assessment of governance conditions, are delaying the disbursement of EU funds.
• The delayed EU funds are described as vital for digitalization, regional integration, and the green transition.

Policy recommendations and priorities

• Fiscal policy:
  • A credible and growth-friendly fiscal adjustment plan is needed to safeguard macroeconomic stability.
• Monetary policy:
  • Monetary policy should remain in restrictive territory to deliver a sustainable return of inflation to target.
• Structural and coordination priorities:
  • A coordinated policy approach is needed to:
  • improve Hungary’s productivity,
  • reduce regional inequality,
  • strengthen governance,
  • advance the green transition.

Subjects and keywords

• Subject: Financial sector policy and analysis, Financial sector stability, Housing prices, Inflation, Prices, Public debt
• Keywords: audit oversight, control environment, Europe, Financial sector stability, Global, holdings of SDR, holdings rate, Housing prices, Inflation, inflation pressure, safeguards assessment of the Magyar Nemzeti Bank

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