There may not be any indication of the current contraction in economic performance
On Spirit FM’s “Beyond the Joke” program, economist Estefan Madar, chief analyst at Portfolio, said that the economic crisis caused by the Coronavirus epidemic was of a special nature and was unprecedented.
According to the expert, the profession also said about the financial crisis ten years ago that it occurs every hundred years. The current crisis is more specific, but more appropriate in a sense. The experience of the first wave is that although the economy stopped, it quickly recovered after that. Since the economic operators were able to adapt to the changing situation, they were able to solve the problem very quickly.
For the first time among advanced economies, the United States will act until there is no effect of this downturn in economic performance, but many other countries believe that they may be able to overcome this problem relatively soon. This is because this crisis does not affect certain parts of the economy, or to a very modest extent. “
The economist added that it was true that another part of it – tourism and hospitality, for example – had a devastating impact. This, in turn, is a relatively small slice of the economy, so as other sectors grow, the overall performance of the economy is working very slowly in fact to address the downturn that the economy experienced in the second quarter of last year. Also in Hungary, very good economic performance was achieved in the fourth quarter of last year, despite the fact that the second wave of the epidemic has arrived. The adjustment also appears to have been very successful, as the economy even managed to grow compared to the previous quarter. The profession expects a so-called “incomplete recovery”, and there are optimistic expectations about the overall performance of the economy, and the question is what will happen to the sectors affected by the crisis.
The current crisis is specific, and it does not affect all elements of the economy, but only subcomponents. Its impact may vary from country to country, where tourism is important and expectations vary. Regarding the management of the Hungarian crisis, Istvan Madar explained that the government chose a special path. It spends primarily on investments – along with a “handover ahead” philosophy – in sectors whose capacity can be expected to increase very quickly after the crisis, and this will have a good effect on overall economic performance. They are being helped in a very exceptional way. While the sectors affected by the crisis are treated with relative harshness by the government. In other countries, various aid and benefits in this area are measured generously, and even then this was completely restricted in Hungary.
We may have a feeling of inferiority, but it is difficult to compare that internationally. The outcome of how the economy can reach pre-crisis levels will be seen as the crisis passes. However, many country-specific factors will play a role in this as well, presumably The Greeks, Spaniards and Italians will not feel as fortunate as the people of a northern European country where there is almost no tourism, “added the lead analyst.
The whole conversation You can listen to it here.