Indicator - Economy - Remittances also indicate economic recovery

Indicator – Economy – Remittances also indicate economic recovery

Not only macroeconomic indicators, but also cash flow data support the fact that the Hungarian economy weathered the shock caused by the coronavirus pandemic much faster than expected and returned to a strong growth trajectory, Andras Tally told Index. According to the Deputy Minister of Finance, the change in the number and value of bank transfers is also a good indicator that economic actors, companies and the general public are also able to perform more strongly. While in the first wave of the Coronavirus (last spring) the number and value of remittances also fell below the 2019 level, in the second half of last year the value of remittance transactions and the value already embedded in them significantly exceeded the previous peak data of 2019. Moreover, in December From last year, the current peak has been reversed: based on customer requests, banks have already transferred nearly 16,000 billion HUF, and transfers over 33 million HUF are 10 percent higher than in December 2019.

According to Andras Talai, this year has achieved even more impressive results. The first eight months of the year saw an unprecedented peak in online conversions. For the first time, the average number of transfer transactions rose to more than 30 million per month, with a total of 240.6 million bank transfers, up 8 percent from 2020, according to Giroud. The Deputy Finance Minister noted that the strengthening of economic actors is further evidenced by the fact that the value of corporate and retail remittances increased by 17.6 percent and approached 100 trillion HUF (one hundred thousand billion) within 8 months.

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According to Andras Talley, the fact that the rate of transfer turnover between firms and the population is also increasing indicates that economic life is picking up, as the expansion of cash flow is an essential part of the exchange of goods.

The rise in remittances is further evidence that the growth of the Hungarian economy will be very rapid this year.

Data for the summer months predict that the second. After 17.7 percent in the quarter, the fourth fastest growth in Europe, the momentum will continue and GDP growth may be at a record high this year. The Ministry of Finance estimates that growth could be between 7 and 7.5 percent in 2021, Andras Tlay reminded, then noted that many international analysts, such as Morgan Stanley, expect growth of more than 7 percent this year.

The increase in the number of remittances also indicates that players in the economy are becoming more committed to electronic payments, Andras Talai said. In addition to the epidemic, the popularity is also due to the modern instant payment system (AFR), which debuted in March last year and allows transfers within a maximum of 5 seconds each weekday. With the expansion of the system, an increasing number of corporate transfers have been made through this system for their smaller payments of less than HUF 10 million. Andras Tally reminded that in the second quarter of this year, more than fifty percent of domestic transfer transactions were already carried out in the Af system: more than 39 million transactions were recorded in the statistics, within which 8385 billion HUF were sent from sender to recipient in Moment.

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According to Andras Talai, the convenience and security of electronic payment solutions discovered during the pandemic, along with the economic recovery, may lead to a significant increase in the movement of domestic remittances in the coming months. st. The management of century money on the one hand is a relief for the population and companies, and on the other hand it brings great benefits to the national economy, since there are no additional costs such as cash, where, for example, production, transportation and storage is a serious financial burden.

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