Index - Economy - Arpad Kovacs: We are approaching a net depositor position in the European Union

Index – Economy – Arpad Kovacs: We are approaching a net depositor position in the European Union

According to the head of the Budget Council, fulfilling the budget allocations for this year may be even more dangerous than the fact that in addition to the “usual” uneven public receipt of funds already allocated to various EU programs, HUF 2,500 billion from the recovery fund may be withheld.

It was given by Árpád Kovács to the portal novekedes.hu in his interview One scenario, he said, could be that the source of the 326 billion fort EU recovery fund considered in this year’s budget will eventually be available, albeit with a delay, this year. He added that if the funds are run in 2021, only surplus budget expenditures associated with forced government securities and credit operations will remain, and since we get them in euros, there is no inflationary loss on the funds.

According to the Finance Minister, we will soon be net shareholders, we need to rethink our situation. The analyst says otherwise.

The head of the Budget Council noted that if we get the money only next year, then the full amount will have to be paid this year.

A smaller portion of the required resource can only be secured from general government revenue or from economic growth significantly higher than budgeted.

For the most part, it should be covered by the issuance and borrowing of government securities.

Arpad Kovacs noted: The debt-to-GDP ratio can only be expected to fall moderately this year, and it will be around 80 percent.

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The economist also noted that the decision cannot be ruled out as prolonged, and even the mobilization of nearly HUF 350 billion, the source of the payback scheduled for next year, will be moot. He added that he attributes this possibility to being small. He emphasized that Hungary’s contribution to the common treasury would increase in proportion to the gross domestic product, reaching more than 500 billion HUF this year. He put it this way: “If we ignore the money in the redemption fund, we approach the position of a not very distant net depositor, and when we hear our word, this also cannot be ignored.”

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