Matolcsy: "modest growth" could still be achievable this year

English2020. jún. 18.Reuters

Hungary's economy could rebound quickly from the aftermath of the coronavirus pandemic from the third quarter and a "modest growth" could still be achievable this year, central bank governor Gyorgy Matolcsy told weekly Mandiner on Thursday.

He said the key element and condition for a fast rebound from the third quarter was boosting investments.

"Accelerating public sector investments can create new jobs and generate strong positive ripple effects in an economic environment when demand is weak," Matolcsy was cited as saying in an interview.

Hungarian industrial output plunged by 36.8% in April as the coronavirus pandemic sent the economy into freefall, with car factories virtually halting production. nL8N2DI17Y

Analysts polled by Reuters expect the Hungarian economy to shrink by 5.1% this year. nL8N2DU389

The National Bank of Hungary had forecast 2% to 3% economic growth in its March inflation report.

The next policy meeting is on June 23, when the Monetary Council will discuss fresh economic forecasts of the bank's quarterly inflation report. Matolcsy did not reveal the new forecasts on Thursday.

He said the central bank's ongoing programmes to help companies would switch to higher gear by the third quarter, helping corporate investments.

"On the whole, I think recovery could be faster than many anticipate at this moment. If this happens, a modest economic growth is still achievable this year," he added.

The government expects the economy to shrink by 3% this year.