The IMF’s Executive Director for Hungary published the Staff Report on Article IV Consultation on 10 May 2017, which followed the findings of experts of economic policy consultations held in February-March in Budapest.

The IMF has welcomed the good performance of the Hungarian economy in recent years. The report notes that these achievements have been equally facilitated by a supportive economic policy, the high absorption rate of EU funds and a favourable external market environment. The IMF has also highlighted the results of tax administration reforms, which had led to further progress in fighting the grey economy and enabled the more efficient collection of taxes. In the analysis of public work programmes, the report praises the introduction of incentives designed to assist transition to the primary labour market as important pro-productivity steps.

The Staff Report attributes sluggish growth in 2016 to the lower absorption rate of EU funds and the subsequent drop in investment. In 2017 however, in line with the Government’s economic policy objectives, further output, consumption and investment growth as well as falling unemployment is expected.

The IMF points out that the progress achieved in the economy and the banking sector as well as the rebound in lending has opened the way for the gradual phasing-out of non-conventional monetary instruments. The experts emphasise that a stable business environment requires a predictable economic policy, the modernization of regulations and transparency. Through comprehensive structural sectors supplementing a pro-growth economic policy and the more efficient utilization of EU funds the country’s growth potential could be increased and government debt could be further reduced.

The Staff Report is available at the following link:

(Ministry for National Economy)