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2019 OECD Economic Surveys: Hungary 2019

image of OECD Economic Surveys: Hungary 2019

The prospering economy has boosted employment and reduced unemployment to historical low levels. The risk of overheating is increasing with double digit growth in wages and higher consumer price inflation, although it remains within the central bank’s tolerance band. The recovery could be prolonged if the supportive macroeconomic policies become more restricitve. Looking ahead, public spending pressures are increasing with population ageing and unless corretive measures are taken public debt may increase again. Reform of the pension system needs to contain rising pension spending and old-age poverty. At the same time, a more flexible health sector is needed to respond to the changing demands arising from population ageing. Economic growth has been geographical uneven as the capital has benefitted from growth enhancing agglomeration effects and some regions, particularly in the west of the country, have benefitting from strong inwards FDIs. On the other hand, poor and rural regions are left behind as they lack integration into local and national supply chains. Development policies tend to pursue centrally determined objectives, while local authorities have few possibilities for identifying and implementing projects that are best suited for bolstering local growth.

SPECIAL FEATURES: AGEING; REGIONAL DEVELOPMENT

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Basic Statistics of Hungary, 2017

(Numbers in parenthesis refer to the OECD average)*

The Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The Survey was prepared in the Economics department by Jens Høj, Gabor Fulop, Ania Thiemann, Rory O’Farrell, Orsolya Fedor, seconded from the Hungarian Ministry of the Finance, and Anna Vindics under the supervision of Patrick Lenain. Statistical research assistance was provided by Klaus Pedersen and editorial assistance was provided by Poeli Bojorquez, Stephanie Henry and Sylvie Ricordeau. The previous Survey of Hungary was issued in May 2016.The Survey was discussed at a meeting of the Economic and Development Review Committee on 6 November 2018 with participation of representatives of the Hungary government and representatives of Denmark and the United Kingdom as lead speakers. Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at www.oecd.org/eco/surveys.

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