The building of the NBH in Budapest – Photo: wikimedia

Governor: Central bank crisis management successful

The National Bank of Hungary (NBH) handled the 2020 crisis successfully, and kept inflation at 3.3 percent, close to target, NBH Governor Gyorgy Matolcsy told parliament's economic committee, where he presented the NBH's annual report.

To eliminate the “last vestiges of the crisis”, Hungary will have to focus on competitiveness, he said. The NBH has already listed the steps to improve competitiveness, to exploit the country’s potential, he said.

The report was approved by the committe with 9 votes in favour and 4 against.

During the economic crisis in the wake of the coronavirus pandemic last year, the NBH focused on preserving the stability of Hungarian economy and jobs, as well as on laying the foundations for a rebound once the crisis has passed, Matolcsy said. One of the most effective instruments in Europe and Hungary was the loan moratorium, which Hungary has been maintaining the longest, he said.

Thanks to successful crisis management, the loan stock of households and companies grew by 14 and 9 percent respectively last year, Matolcsy said. Small and medium-sized entrepreneurs received support totalling nearly 3,000 billion forints (EUR 8.4bn) and targeted to support loan repayment and wages, he said.

Loans were also boosted when the NBH cut the base rate by 15 basis points both in June and July, he said.

Hungarian crisis management was above European average and enabled the country to rebound to pre-pandemic levels in 2021 already, Matolcsy said.

The NBH has been profitable since 2013. In 2020, its profits grew by 725 million forints to 255.4 billion, he said.

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