Now it could as well be time for the West to praise us. But that is far from being the case. The European Union’s attitude to Hungary is anything but praise, which is due to the grievances foreign companies have suffered in Hungary. Data that were published yesterday about the growth of the GDP in Hungary in the first quarter of 2013 could be praised by Brussels. In the eurozone GDP growth in the first quarter of 2013 was down from that in the last quarter of 2012 by 0.2 percent; the figure was -0.1 percent for the 27 EU member states put together, while in Hungary it was definitely in the black. In Hungary it was growth of 0.7 percent despite the predictions of some pessimistic observers. After some minor positive signs, this is the first real surprise. This is good news not just for those who are obliged to be optimists by their position.
Yesterday even analysts of the Japanese Nomura investment bank, who had recently predicted a bleak future for Hungary, welcomed this development. They have a good reason to be pleased if they have a look at other countries of Europe. The German economy, Europe’s powerhouse, could only produce a GDP growth of a meager 0.1 percent. The other major European player, France had -0.2 percent. Hungary finished third in Europe and was only outpaced by two Baltic states.
Granted, statistics attract little public attention until the benefits of a low inflation and higher growth are not felt in daily life. This welcome tendency needs to prove itself not just in statistics but in daily practice. Although the initial results are fragile, there is hope that with time they will bring higher living standards. Let us not forget that a crucial source of lower inflation is the governmental measures to reduce household utility costs. If inflation decreases, in time all of us can buy more goods for our salaries. Hopefully growth will also mean more jobs and an even more stable central budget – due to higher revenues of the treasury and a faster reduction of the government debt.
In sum, these developments can bring an economic turnabout – and that will have been achieved without Hungary yielding to international pressure to return to policies that only favor the interests of capital and reduce the tax burden of multinational companies. “Such an economic policy can never produce growth,” cried the detractors of Hungary’s course but time has proved them wrong.
In the meantime our eastern neighbor, Romania, which had gone along IMF instructions without questions, is now begging to multilateral organizations for a safety net, and Bucharest’s proposals submitted to the IMF to ease the burdens of its citizens have been turned down one after the other. It is worth comparing the situation of Romania with that of Hungary and put the question: which model will be more successful in the long run?
Yesterday even analysts of the Japanese Nomura investment bank, who had recently predicted a bleak future for Hungary, welcomed this development. They have a good reason to be pleased if they have a look at other countries of Europe. The German economy, Europe’s powerhouse, could only produce a GDP growth of a meager 0.1 percent. The other major European player, France had -0.2 percent. Hungary finished third in Europe and was only outpaced by two Baltic states.
Granted, statistics attract little public attention until the benefits of a low inflation and higher growth are not felt in daily life. This welcome tendency needs to prove itself not just in statistics but in daily practice. Although the initial results are fragile, there is hope that with time they will bring higher living standards. Let us not forget that a crucial source of lower inflation is the governmental measures to reduce household utility costs. If inflation decreases, in time all of us can buy more goods for our salaries. Hopefully growth will also mean more jobs and an even more stable central budget – due to higher revenues of the treasury and a faster reduction of the government debt.
In sum, these developments can bring an economic turnabout – and that will have been achieved without Hungary yielding to international pressure to return to policies that only favor the interests of capital and reduce the tax burden of multinational companies. “Such an economic policy can never produce growth,” cried the detractors of Hungary’s course but time has proved them wrong.
In the meantime our eastern neighbor, Romania, which had gone along IMF instructions without questions, is now begging to multilateral organizations for a safety net, and Bucharest’s proposals submitted to the IMF to ease the burdens of its citizens have been turned down one after the other. It is worth comparing the situation of Romania with that of Hungary and put the question: which model will be more successful in the long run?
Read more: Gliding to success – a commentary on Hungary’s economic performance
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