BUDAPEST: Obstacles to long-term sustainable growth remain

The European Commission acknowledged Hungary’s “robust economic growth” in its country report published on Wednesday (26 February) but pointed out that obstacles to long-term sustainable growth remain. 

The EU executive found that the country’s growth is mainly driven by supportive macroeconomic policies, record investment levels and an increase in employment levels.

However, the Commission indicated that the tepid increase of productivity per worker was a sign that growth may slow once the country reaches full employment, pointing out that “the lack of available skilled labour is a key obstacle to productivity-enhancing investment and innovation”;

Very low real interest rates, easy financing conditions, rising production costs, which increased inflation are among factors that compound the risks of an overheating market.

The Commission found that the country made little progress in implementing the EU’s recommendations from last year to get more people from vulnerable groups into work, improve healthcare and address social mobilities issues.

No progress at all has been made in fighting corruption, safeguarding judicial independence, with “quality and transparency of decision-making and social dialogue … among the weakest in the EU,” the Commission report found. (Vlagyiszlav Makszimov |

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