Hungary’s central bank governor plugs away at arguments for fiscal tightening

National Bank of Hungary (NBH) governor György Matolcsy reiterated and refined arguments for reining in next year’s budget deficit in an op-ed piece published on the website of daily Magyar Nemzet on Monday.

Matolcsy has said a number of times that the government’s 5.9-percent-of-GDP budget deficit target for next year is too high, while stressing that the central bank continues to move forward in a strategic alliance with the government, in spite of differences on the matter.

In the piece, Matolcsy said the more fiscal resources a state puts toward achieving recovery, the smaller the chance the return to economic growth will be sustainable, and he warned that “tipped balances will force fiscal austerity with time”.

Matolcsy said

the faster fiscal balance is achieved, the faster resources outside of the budget become available to support sustainable growth.