Former MNB governor predicts serious austerity measures if the current government stays in power

If the current government remains in power, budget cuts seem inevitable, warned György Surányi, former governor of the National Bank of Hungary (MNB), at the Forbes Money Summit. He recalled that a similar process took place in 2022, when a transaction tax was introduced, the bank tax was increased, and numerous investments were postponed.

It doesn't matter what they call the austerity measures. Even if they call them prune dumplings, they will still be austerity measures,

the former c.bank governor said.

Surányi emphasized that although there is no crisis in Hungary in economic terms, "with the exception of professional sports, virtually all subsystems of public finance are underfunded and in need of serious internal reform, and these problems cannot be solved by budget restructuring alone." He stressed that addressing tensions in healthcare, education, innovation, and national defense will be an unavoidable task for the next government.

The economist is skeptical that the current government will be able to change its values through its fiscal policy. At the same time, he added:

If there is change and new values emerge, then there will be considerable scope for sensible economic management.

On the expenditure side, he identified significant savings opportunities, including reducing the costs of national consultations, public media subsidies, and the hundreds of billions of forints flowing through state-owned companies. In addition, he sees significant revenue-raising potential in more effective taxation of gambling.

If this is supplemented by EU funds, it could create room for maneuver that could significantly improve the quantitative problems seen in the subsystems,

György Surányi said in conclusion.

Cover photo: Portfolio