Hungary: Staff Report for the 2010 Article IV Consultation and Proposal for Post-Program Monitoring
IMF Staff Country Reports, February 3, 2011
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- Published: February 3, 2011
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781455216642.002
Executive summary and macro-financial findings
- Hungary was severely affected by the crisis.
- The financial sector has remained resilient throughout the crisis.
- The Central Bank (MNB) paused in mid-2010 and has tightened interest rates by 50 basis points since November in response to a sharp rise in risk premia and higher headline inflation prints.
- The importance of addressing financial sector vulnerabilities is discussed.
- Executive Directors welcomed efforts to support distressed mortgage holders, as long as moral hazard and fiscal costs are contained.
- A medium-term framework was implemented.
Policy assessments and recommendations
- Support for distressed mortgage holders is endorsed conditionally: moral hazard and fiscal cost containment are required.
- Addressing financial sector vulnerabilities is highlighted as an important policy priority.
- Monetary policy actions: MNB’s pause in mid-2010 followed by a tightening totaling 50 basis points since November in response to risk premia and inflation developments.