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Loan creation has not recovered after the crisis owing to a combination of demand and supply factors.
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Based on the latest available data up to 2009, the health status of the Hungarian population is among the poorest in the OECD, including countries with a similar level of income per capita.
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A rapid decrease in unemployment is a short-term priority to limit social problems and reduce the risk of rising structural unemployment.
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Despite a deep recession in 2009 and weak growth in subsequent years, Hungary’s fiscal position compares favourably with many other OECD countries.
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Hungarian debt level has steadily increased since 2001, with the debt-to-GDP ratio reaching about 84% at end-2011.
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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.
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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Az OECD legutóbbi Magyarország országtanulmánya szerint gyors cselekvés szükséges a magyar gazdaság stabilizálásához és egy tartós gazdasági fellendülés alapjainak megteremtéséhez.
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Reducing the extent of inactivity and promoting labour supply is essential to foster labour market outcomes in Hungary in the medium term.
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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.
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