Hungary: Selected Issues Paper

March 29, 2013

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Format: Chicago

Hungary: Selected Issues Paper, (USA: International Monetary Fund, 2013) accessed November 25, 2024

Summary

Non-performing loans (NPLs) were found to respond to macroeconomic conditions, such as GDP growth, unemployment, and inflation; there are also strong feedback effects from the banking system to the real economy. This suggests that the high NPLs that many CESEE countries currently face adversely affect the pace of economic recovery. The note also evaluates different policy options to achieve permanent fiscal consolidation in Hungary. A fiscal consolidation based on a reduction in government transfers can stimulate labor participation, and a resulting increase in the returns to capital can increase investment and output in the long term.

Subject: Consumption, Expenditure, Financial institutions, Fiscal consolidation, Fiscal policy, Labor, National accounts, Nonperforming loans, Public investment spending

Keywords: Asset quality, Bank, Consumption, CR, Data quality, Europe, Fiscal consolidation, Global, Inertial consumption dynamics, Investment, ISCR, Nonperforming loans, NPL shock, NPLS ratio, Output, Public investment spending

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2013/086
Stock No:

1HUNEA2013002
ISBN:

9781484310212
ISSN:

1934-7685

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