IMF Staff Country Reports

Hungary: 2024 Article IV Consultation-Press Release; and Staff Report

August 2, 2024

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Format: Chicago

International Monetary Fund. European Dept. "Hungary: 2024 Article IV Consultation-Press Release; and Staff Report", IMF Staff Country Reports 2024, 268 (2024), accessed October 19, 2024, https://doi.org/10.5089/9798400283703.002

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Summary

The 2024 Article IV Consultation discusses that Hungary is emerging from a period of shocks. The pandemic, Russia’s war in Ukraine, and crisis-related stimulus widened fiscal and external imbalances and triggered double-digit inflation in 2022. Thanks to an effective monetary policy response aided by falling commodity prices and a tighter fiscal stance in 2023, inflation came down significantly, while the labor market and financial sector remained resilient. Despite some progress, the ongoing negotiations on the super milestones, including the Commission’s assessment of governance conditions, are delaying the disbursement of EU funds, which are vital for digitalization, regional integration, and the green transition. A credible and growth-friendly fiscal adjustment plan is needed to safeguard macroeconomic stability. Monetary policy should remain in restrictive territory to deliver a sustainable return of inflation to target. Coordinated policy approach is needed to improve Hungary’s productivity, reduce regional inequality, strengthen governance, and advance the green transition.

Subject: Financial sector policy and analysis, Financial sector stability, Housing prices, Inflation, Prices, Public debt

Keywords: Audit oversight, Control environment, Europe, Financial sector stability, Global, Holdings of SDR, Holdings rate, Housing prices, Inflation, Inflation pressure, Safeguards assessment of the Magyar Nemzeti Bank

Publication Details

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