Hungary’s GDP is expected to fall 5% in annual comparison in the second half of 2020, Finance Minister Mihály Varga told public broadcaster Kossuth Rádió.
The economy strengthened somewhat in June, but GDP in the second quarter is still expected to fall by an annual 10%, Varga said. The economy suffered a 20% setback in April in annual comparison, the largest fall recorded yet during the coronavirus pandemic, Varga said. The fall slowed in May, and the trend turned in June, he said.
The budget deficit at the end of H2 was at 3.8-4% of GDP, or 1,800 billion forints (EUR 5.2bn), the minister said. It was originally forecast at 1% of GDP, or 488 billion forints (EUR 1.4bn), he said. Spending was driven by the 600 billion forints allocated to the pandemic protection fund and the 1,100 billion for the economy protection fund, he said. Restarting the economy and a potential second wave of the epidemic may increase the deficit further, he added. Varga noted that Hungary’s economy was robust when the epidemic hit the country, with a 5% growth in 2019 and 2% in Q1 2020.
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