According to GDP data for Q4 2020 released since then, the recovery appears to be faster than expected, so growth in both 2021 and 2022 could well be more dynamic than expected earlier. The inflow of European Union funds to Hungary may also help the pace: the new 7-year budget cycle of the union is starting in 2021, which can also boost the economy.
However, the ongoing Covid-19 pandemic remains a negative risk factor for the economy: in order for the economic increase to continue, mass vaccination must be carried out at highest speed and restrictions must be relaxed gradually, but rather as soon as possible.
As a result, sectors which had to close down because of the pandemic can once again contribute to economic performance, which is expected to return to its pre-pandemic level. Strengthening innovation, research and development and education, as well as keeping the investment rate at a consistently high level is a priority for long-term macroeconomic growth. However, sustainability related to investments has to obtain a much higher role – not only in Hungary but also in the whole EU. Transformation to a green economy is essential: the economic growth and the economic convergence can be sustainable if the investments are energy-effective and households and the transport sector will use less energy to their operation as well.
Following the crisis, economic policy must once again place greater emphasis on improving balance indicators. Last year, the general government deficit spiked in most member states, and both the EU and the Hungarian indicators may have been around 9 percent of GDP. This needs to be stabilised over the coming years and the process of debt relief has to begin. At the same time, attention must be paid to inflation risks: money poured into the economy as a result of monetary intervention may cause inflation once economic conditions have recovered, and if this happens, central banks will need to react in time.