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Indicator – Economy – GKI: 1 euro could cost 430 forints permanently without EU money

Indicator - Economy - GKI: 1 euro could cost 430 forints permanently without EU money

22.08.2022. 09:39

According to GKI Gazdaságkutató’s calculations, if Hungary does not have access to EU funds, the euro could cost 430 forints permanently. The Hungarian government is to send the response letter to the European Commission by midnight on Monday, which could play a crucial role in allocating the funds.

GDP growth could drop by as much as two to three percent, and one euro could cost 430 forints permanently if EU money did not reach Hungary – this is how the economic researcher GKI calculates ATV NewsAccording to his report.

The Hungarian government is to send the letter to the European Commission by midnight on Monday, in which it writes down what it is doing to prevent corruption. As is known, at the beginning of July, Gergeli Golias announced in Kormányinfo that the government had accepted the proposals of the European Commission, which were as follows

  • In corruption cases, there should be a place for judicial processing, and a specific normative text was also sent;
  • Before the legislation launched by the government, time must be given to social counseling;
  • A significant part of EU funds should be used to achieve the greatest possible energy independence;
  • The number of public deals with a single bid will be reduced to less than 15 percent.

The bets are huge: while Hungary will get 5.9 billion euros, or 2,400 billion forints, from the Recovery Fund, and 22 billion euros from the 2021-27 EU budget cycle, the equivalent of 8,800 billion forints.

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According to the CEO of GKI Gazdaságkutató, László Molnár, if our country does not receive the money, it should start some kind of budgetary reduction, which in turn will directly reduce GDP. The second effect will be shown by the forint exchange rate, and the forint will weaken even more, according to their calculations, the loss of money can lead to a permanent exchange rate of the forint to the euro of 430.

(Cover Image: Tamás Kaszás/Index)

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