The government expects a 3 percent decline in GDP by 2020 and a rapid recovery next year, with the European Commission much more pessimistic. The German auto industry collapsed, and the construction of the BMW plant in Debrecen was also postponed. Country life is slowly restarting, but companies are still in serious trouble. This is the weekly economic summary of hvg.hu.

In the shadow of the coronavirus epidemic, the government has begun planning the 2021 budget. It is no longer new that they want to vote on the budget before the summer parliamentary recess, but now it is not even possible to really know what the state of the economy will be. in a month and a half. Viktor Orbán himself announced that due to the epidemic, the 2020 budget will be redesigned, but the result has not been made public. In other words, Hungary currently does not have a public budget that is not clear that it has nothing to do with reality. But at least 420 billion Brussels forints were found for economic protection.

But the government also announced the convergence program this week. Under the EU’s expected medium-term economic plan, GDP could be cut by 3 percent this year and the deficit will be released more than promised, to 3.8 percent of GDP. By 2021, they already expect 4.8 percent growth, which means they expect a rapid rebound in the economy. Unemployment could also rise to 5.6 percent, contradicting Viktor Orbán’s promise that everyone will have a job within three months. The figures also show that the government spends less on education and pensions as a proportion of GDP year after year.

The European Commission does not see the situation in the Hungarian economy as easy to save as our government. According to the committee’s recent economic forecast, the Hungarian economy will shrink by 7 percent instead of 3 percent in 2020, the unemployment rate will be 7 percent instead of the 5.6 expected by the government, and the deficit could increase to 5.2 percent.

The liquidity subsidies offered to companies and temporary labor protection measures will have a limited capacity to alleviate the damage, so the Commission expects a sharp rise in unemployment. Then in 2021 we can start to recover, then GDP can grow by 6 percent. In other words, the board expects a recovery in the form of a U instead of a V, by the end of 2021, we have not yet reached pre-crisis levels.

It will be much easier to see how the economy can be saved if we know quantitatively how deep we need to go back. The normal pace of collecting statistical data may seem particularly slow in a crisis situation, but the Central Statistical Office has released at least significant data for March this week. When looking at these numbers, it’s important to remember that there was no emergency in the first ten days of March, tourists were just beginning to lag behind, and store and factory closings came only later.

Industrial production fell 10 percent in March from the previous year, of course, because all major vehicle factories closed in the second half of the month. The construction industry grew an additional 30 percent as homes delivered at the time of the housing tax cut through the end of 2019 were delivered, but the number of new building permits decreased by 1 percent in Budapest and 36-50 percent in the field. Tourism has practically collapsed, and sales fell 65 percent.

At first glance, the inflation figure could even be reassuring: consumer prices have risen just 2.4 percent, we have not had such low inflation in two years. But the situation is quite different if we break down the data in detail: fuel prices have fallen by almost 23 percent due to falling oil prices, everything else has become more expensive, especially food prices. . Retail store sales grew 3.5 percent, with supermarket sales 15 percent and pharmacy sales 38 percent, but everywhere they stagnated or fell, and service station sales fell 16 percent .

Picture of the week: The 70th anniversary of the opening of Ferihegy Airport was celebrated.

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Terrible data also came from abroad. The Bank of England estimates that the performance of the UK economy could drop 14 percent this year. And in the United States, 20 million people lost their jobs in April alone.

However, the biggest problem for us is clearly that the German industry has not met even the worst expectations. We cannot say that there has been no decrease since reunification because statisticians have only been using the current methodology since 1991. Overall, the decrease was 11.6 percent, while the auto industry fell 31.3 percent. .

The basic premise is that if the German auto industry is in trouble, Hungary will understand. BMW has also announced that it will postpone the construction of its Debrecen plant for a year for reasons of economy. The company is reducing its development costs from € 5.7 billion last year to € 4 billion.

Construction of the BMW plant in Debrecen

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Foreign Minister Péter Szijjártó quickly indicated that he would negotiate in person with company leaders next week, and construction was already underway. But this does not mean that there is no postponement: we have received information from the BMW Group Hungary that it “may take several months” to delay work.

We also received bad news about the situation of Hungarian companies. OTP suffered a loss of 4 billion HUF in the first quarter alone. The refund moratorium and the bank tax will take 6 billion HUF from Erste’s earnings. Mol recorded a loss of 48 billion HUF in the first three months of the year. Dunaferr workers received a letter from their employer saying that if the situation did not change, they would have to reduce the working hours of some workers.

The CEO also writes that April payments will arrive on time.

Textile and clothing companies, as well as Hungarian clothing factories, are also in trouble, producing mainly for contract work. Restaurants also had to develop an overnight survival strategy; We also collect some examples of those who try not to give up even at that time. Many of the town’s stores are already at a critical level, as reported by Coop’s chairman of the board. Among the large Hungarian companies, at least Richter did well: The pharmaceutical company’s sales and after-tax profits rose unprecedentedly as people went to pharmacies.

Meanwhile, the country has already restarted, at least outside of Budapest and Pest County. Regulars took possession of the terraces of rural cafes and restaurants as soon as they were able to reopen on Monday. The people of Balaton hope this summer to choose the Hungarian Sea instead of abroad. Customers also broke into Ikea stores, if there is no other fun in Budapest.

The 300 South Korean workers at the Samsung factory in Göd were accommodated at the InterContinental Budapest hotel. At least four of them have been caught by the coronavirus, they are in quarantine. There is also a need for foreigners in agriculture, the government this week allowed those from neighboring countries to come work in agriculture and get to work during the two-week quarantine.



The coronavirus is the greatest crisis of our time, in which it is literally vital to discover it from an authentic source. At HVG, we are committed to this mission even in this situation: to provide accurate, objective and independent information to our readers.

Support our work to bring you up-to-date information even in difficult circumstances.

The coronavirus is the greatest crisis of our time, in which it is literally vital to discover it from an authentic source. At HVG, we are committed to this mission even in this situation: to provide accurate, objective and independent information to our readers.

Support our work to bring you up-to-date information even in difficult circumstances.

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