Coronavirus: Orbán government rescue package has been drawn up, here is the list

The economic crisis triggered by the epidemic exceeded previous economic prospects (we wrote about this in detail in our other article, ed.). Therefore, the main objective of Hungarian economic policy was to protect the economic results achieved so far and to establish economic measures to restore economic growth after the epidemic. in the section on economic policy objectives in the convergence program. The government believes in the document that Hungary has made the decisions in time that are essential to a successful fight against the epidemic, as well as to help restart the economy once the epidemic has ended. However, restrictive measures have a negative impact on the performance of economic operators. That is why the government revised the 2020 budget and, therefore, launched a comprehensive program to protect the economy. Taking into account the budgetary impact of the temporary economic recession and the economic recovery measures, the Ministry of Finance argues that the budget deficit will remain low compared to the circumstances. Instead of the original rate of 1% of GDP and then raised to 2.7%, the Ministry has now made a deficit forecast of 3.8%.

“In terms of the economic scale of the measures, it can be said that so far the greatest savior and economic stimulus package, the size of which, along with steps taken by Magyar Nemzeti Bank to help finance the economy, represents almost 20 percent of GDP“- a document sent to Brussels reiterates the government’s communication to date.

The document presents the government rescue package for the coronavirus epidemic in two complete tables at once (direct budgetary measures and their coverage). So far there has been no example of this type of presentation of the series of measures, and following the numerous announcements, there has been a great need for these summaries and for quantifying the budgetary implications for 2020. It is also valuable in tables that

1. the government will also indicate the estimated impact of the steps on the 2021 budget, and
2. It also indicated the status of adoption of the measure. According to them, a series of measures amounting to almost 2% of GDP (almost half of the budget package) is still under development or only partially adopted.

It is important to note that the convergence program details “only” the part of the economic rescue package that the government calls unprecedented, which directly affects the budget (epidemic fund, economic protection fund), but also only a part of them. It is also interesting that several weeks after the first announcements, several specific measures are unknown or under development (investment promotion, support for priority sectors).
The total budget package as a part of GDP enters 4.55%, which is approximately HUF 2.1 trillion. This is also in line with the information provided so far, as the cost of controlling the epidemic (wages of health workers, purchase of equipment, etc.) is around 600 billion HUF (page 2 of the convergence), while the government has decided to reallocate 1,350 billion HUF to economic protection. altogether it approaches 2 billion HUF and the base for protection against the epidemic is open from above, because the coronavirus will remain with us for some time.
It should be noted that the elements that do not directly affect the budget (credit moratorium, interest loans and loans with guaranteed collateral, MNB package) represent a much larger part of the total package (approximately 80%), as we have already presented in our article and the situation. It has not changed since then.