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Controversial domestic policies have contributed to uncertainty thereby hurting confidence. Making the economy and financial system more robust to shocks and promoting a business-friendly environment will put growth on a sounder footing.
Hungarian debt level has steadily increased since 2001, with the debt-to-GDP ratio reaching about 84% at end-2011.
Reducing the extent of inactivity and promoting labour supply is essential to foster labour market outcomes in Hungary in the medium term.
Swift action is needed to stabilise the Hungarian economy and put growth on a sound footing for a durable recovery, according to the latest Economic Survey of Hungary. Strengthening the credibility and predictability of domestic policies and undertaking much-needed fiscal consolidation will be key.
Az OECD legutóbbi Magyarország országtanulmánya szerint gyors cselekvés szükséges a magyar gazdaság stabilizálásához és egy tartós gazdasági fellendülés alapjainak megteremtéséhez.
Using an estimated DSGE model for Hungary, the paper identifies the possible non-Keynesian channels through which a fiscal consolidation may manifest as expansionary.
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