The Hungarian Economy. On the Wrong Trajectory
The Hungarian Economy. On the Wrong Trajectory

Summary/Abstract: Hungary’s economy has lost the past decade. Since the country acceded to the European Union, it has not been able to converge towards the EU average in per capita GDP, whereas the majority of the countries in the Central and East European region have come much closer to it. The general government and the current account balance improved markedly, but in every other field (consumption, investment, competitiveness, attraction of capital, etc.) Hungary’s performance has lagged behind the majority of the countries in the CEE region. This is due both to the former socialist-liberal and the present national-conservative governments. The irresponsible fiscal and unsuccessful reform policy of the former government contributed to the increase of the state debt. The latter government constrained democracy as well as the functioning of a market economy. Nationalisations, market reorganisations, and the deployment of a tax system as a means of punishment have undermined the rule of law and the security of property. As a result, a low growth potential and the widening of inequalities are economic characteristics of Hungary.

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