The Hungarian government implemented significant restraint and reforms in the mid-1990s, but substantial challenges remain in the medium term. Medium-term fiscal framework will assist in evaluating the preferred approach to managing this range of expenditure pressures and structural reform...

Since beginning economic transition, the Czech Republic, Estonia, Hungary, Poland, and Slovenia have—with much success—employed diverse exchange rate regimes. As these countries approach EU accession, they will need to avoid the perils of too much or too little exchange rate variability when...

Hungary was severely affected by the crisis. The financial sector has remained resilient throughout the crisis. The Central Bank (MNB) paused in mid-2010 and has tightened interest rates by 50 basis points since November in response to a sharp rise in risk premia and higher headline inflation...

This Selected Issues paper for Hungary highlights the monetary policy framework in Hungary and the models used by the central bank (MNB). The MNB’s Quarterly Projection Model combines neo-Keynesian features in the short term with neoclassical features in the long term. It is a two-sector...

The Article IV Consultation highlights the financial system risks that have increased reflecting both the global financial market turbulence and continued rapid credit growth in Hungary. With most new borrowing in foreign currency, the private sector’s net foreign currency liabilities...

Hungary’s 2007 Article IV Consultation reports that with fiscal consolidation on track for 2007 and 2008, short-term risks have receded, especially owing to the favorable international financial environment. Ensuring that the current economic slowdown does not translate into a prolonged period...

This Selected Issues paper on Hungary reports that the public enterprises may pose significant fiscal risks on account of their quasi-fiscal activities and contingent liabilities. More than 85 percent of the economy is in private hands. According to the Privatization Act, assets may remain in...

The principal policy task in Hungary is to place public finances on a sound footing. For monetary policy, the challenge is to identify one-off inflationary influences, communicate these to the public and financial markets, and deal with second-round effects. From a risk-management perspective, a...

Of the new members entering the European Union (EU) in May 2004, several had achieved a decade of impressive export growth, expanding significantly their shares of world markets. The empirical analysis shows that over the period 1994–2004, quality and technology upgrading associated with the...

Economic developments in Hungary during 1995-97 illustrate one of the most remarkable cases of macroeconomic adjustment in Europe over the last decade. Several momentous steps in the integration of the Hungarian economy with the rest of Europe and the industrial countries community took place....