{
  "title": "Hungary: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Hungary",
  "publication": "IMF Staff Country Reports, December 5, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/12/04/hungary-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-48848",
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  "summary": "This 2019 Article IV Consultation discusses that in an increasingly uncertain global economic environment, Hungary’s growth registered one of the highest rates in Europe in 2018. The economy now appears to be running above capacity and wages are growing rapidly amid historically low unemployment.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication date: December 5, 2019\n- Main finding: In an increasingly uncertain global economic environment, Hungary’s growth registered one of the highest rates in Europe in 2018.\n- Current cyclical position: The economy now appears to be running above capacity and wages are growing rapidly amid historically low unemployment.\n- Medium-term outlook: It is thus likely that growth will slow down over the medium term.\n- Policy assessment: Policies have reduced vulnerabilities substantially; however, measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy manoeuvre is rebuilt."
    },
    {
      "heading": "Macroeconomic outlook and risks",
      "content": "- Growth dynamics:\n  - 2018: Hungary registered one of the highest growth rates in Europe.\n  - Medium term: Growth is likely to slow as the economy runs above capacity.\n- Labor market and inflationary pressures:\n  - Wages are growing rapidly amid historically low unemployment.\n  - Wages are outstripping labor productivity growth (phrase preserved as in source).\n- External and export performance:\n  - Slower export growth noted as a factor weighing on outlook."
    },
    {
      "heading": "Structural challenges and competitiveness",
      "content": "- Key constraints:\n  - Wages outstripping labor productivity growth.\n  - Shortcomings in the business environment for small and medium enterprises.\n  - Need to address demographic challenges.\n- Government response:\n  - The government’s competitiveness program contains important elements.\n- Recommended structural focus areas:\n  - Improving the business environment.\n  - Enhancing the legal and regulatory framework.\n  - Increasing labor force participation.\n- Policy objective:\n  - Improvements in competitiveness are needed to sustain rapid income convergence."
    },
    {
      "heading": "Policy recommendations and fiscal stance",
      "content": "- Fiscal consolidation:\n  - Measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy manoeuvre is rebuilt.\n- Supply-side reforms:\n  - Supply-side reforms can help sustain the momentum and address structural constraints.\n\n---\n\n Content in this bundle\n\n- 1hunea2019001\n  - 1hunea2019001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1hunea2019001 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: December 5, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513521404.002",
    "Publication date: December 5, 2019",
    "Main finding: In an increasingly uncertain global economic environment, Hungary’s growth registered one of the highest rates in Europe in 2018.",
    "Current cyclical position: The economy now appears to be running above capacity and wages are growing rapidly amid historically low unemployment.",
    "Medium-term outlook: It is thus likely that growth will slow down over the medium term.",
    "Policy assessment: Policies have reduced vulnerabilities substantially; however, measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy manoeuvre is rebuilt.",
    "Growth dynamics:",
    "External and export performance:",
    "Key constraints:",
    "Government response:",
    "Recommended structural focus areas:",
    "Policy objective:",
    "Fiscal consolidation:",
    "Supply-side reforms:",
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