Sustainability varies from one age to another, a new generation of thinking is needed to grow – says Barnabas Virág, Executive Director of the National Bank of Hungary (MNB) in a press release on the report on growth. András Balatoni, director of MNB, added: this year's report is twice as much as last year, which is no coincidence.
Economic policy plays a key role in economic policy, "said András Balatoni. There are huge reserves in the SME sector to be used, and a second tax reform, effective state and infrastructure is needed.
Internal savings are also an indispensable prerequisite for sustainable growth.
With this we can approach the level of development in Austria by 2030.
A key factor in Hungary's long-term growth is to slip out of the trap of middle-income traps, the National Bank of Hungary (NBH) economist said in a report on growth. Current convergence targets have been approaching supply, while we are now using demand, using a holistic approach.
Extensive growth paths must be intense, employment can not be prolonged for a long time, it should move to a capital-intensive trend aimed at increasing productivity.
Successful competitiveness is based on the complex knowledge of megatrends that shape the global economy, which can be the entry point for our country. Successful convergence in recent decades has seen the development of capital-intensive developments, which would also be useful in Hungary.
If reforms are not implemented, productivity factors remain at the level of average traps. The investment rate must be stabilized by at least 25 percent and full employment should be maintained at the same time.
Potential medium-term GDP growth is 1.5%, while after reforms it may be 4.5%. The doubling of net real wages can be expected by 2030, with a 31% drop in pounds to 9% and cuts in contributions.
The equilibrium budget is also available on the reform path, ie the state should not finance development, and the banking sector has great potential to do so. It is important to put savings into the real economy and not to consume.
Three important mechanisms have been identified to ensure sustainable growth: the size of small and medium-sized enterprises, effective status and demographics – explained András Balatoni.
Small and medium-sized enterprises should have a 6% growth path, and therefore growth in large companies is 2%. As a result of economies of scale, the surplus of small business productivity is 80 percent and 230 percent in medium-sized companies, meaning mergers with significant productivity gains.