Minister of Finance Mihály Varga, who represented the Central and Eastern European group at the meeting, emphasized that the economic risks of the pandemic and the global financial situation were discussed at the meeting.
The representatives agreed that vaccination is the primary solution to recovering from the crisis. Although there are significant uncertainties, the global economy is expected to recover in 2021, assuming vaccinations remain on track, he added.
He explained that governments did the right thing by implementing active fiscal incentives; however, it is also important to consider the sustainability of the running public deficit.
Varga noted that the IMF’s recommendations are in line with Hungary’s efforts so far in several respects. According to the IMF, the production of vaccines and protective equipment must be increased, investments need to be supported, public investment needs to be further increased when the economy restarts, and efforts to curb tax evasion and avoidance need to be stepped up.
Hungary has already launched its healthcare support program, and the Hungarian public investment rate is the highest in Europe, he confirmed. Varga also added that while the Hungarian tax evasion rate was 21 percent in 2013, it is now 6 percent, ahead of many Western European countries.
According to the IMF, developments affecting digitalization and the green economy should be strengthened. Referring to this point, the finance minister explained that a significant part of economic development resources in Hungary is spent on such investments.
Varga also noted that government debt-to-GDP ratio has hit 97 percent worldwide, while the budget deficit in developed economies is around 12 percent. In contrast, the public debt ratio in Hungary is 80 percent and the deficit is 8 percent.