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According to the Portfolio’s estimate, at the end of last year, the value of Hungarian public debt as a percentage of GDP may have exceeded the level of 81%, which also exceeds the level of debt observed after the financial crisis of 2008-2009.
Referring to the estimates of the Ministry of Finance, the economic portal writes that
- the performance of the Hungarian economy may have decreased by 6.4 percent in 2020,
- and the budget deficit as a percentage of GDP could have been around 8.6 percent,
although to the latter it is added that, based on the budget data published since then, the preliminary figure may be higher.
In an opening interview with Index, Finance Minister Mihály Varga said that “the deficit is expected to be around 9 percent,” while he also said 6.4 percent about the economic recession.
Based on all of this, the Portfolio has concluded that
public debt as a percentage of GDP could rise to 81.2 percent.
In other words, due to the coronavirus epidemic and the ensuing economic crisis, the gross debt ratio could have increased by 15.8 percentage points in a single year, which, based on data available since 1990, has never occurred in a single year. and 1993 (an increase of 10.3 and 11.6 percentage points, respectively).
The indebtedness ratio, which was higher than the estimated 81.2 percent, was the last in 1995,
when, according to the Central Statistical Office (CSO), the ratio of public debt to GDP was 84 percent.
Who expects how much debt?
Mihály Varga told the Index that it is estimated that “by the end of 2020 it will be around 80 percent of gross domestic product.” According to the Minister of Finance, it has been a great achievement and success that they have been able to reduce the public debt rate from 80% to 65% of GDP in recent years. However, “the epidemic has now rewritten everything.”
Unfortunately, the gains that we have accumulated over the past few years now seem to have been lost.
The Magyar Nemzeti Bank (MNB) also expects a similar debt ratio: in the Inflation Report published in December, it was stated that it rises to around
In an interview with AzÜzlet.hu, Árpád Kovács, the president of the Budget Council, also spoke about a debt-to-GDP ratio of around 80 percent; He told us another 77 percent in September, although we didn’t know it at the end of the year. due to protection against
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