The conditions for sustained economic growth are missing, while income disparities are on the rise. Government debt is not reduced, but the structure is changing. The level of social expenditures is low, while inequality among generations is increasing. Economic activity is rising somewhat, though only as a result of the public works programme and the increase of people working abroad.
Hungary's competitiveness has deteriorated, while labour productivity is only growing at a slow rate. Corruption is the most severe problem of the economy. In terms of transparency, the quality of has significantly worsened.
Hungary has high levels of debt relative to the GDP. The currency exposure has been reduced somewhat, but short-term debt remains high. The foreign currency indebtedness of the population has been one of the most serious problems in recent years. The conversion of these loans into HUF brought some relief. Interest rates are now lower than have been for many years and inflation is low. The disposable income and savings of the population are not growing.
The tax structure has changed somewhat in recent years: taxes on consumption increased (Hungary has the highest VAT rate), while taxes on business have slightly decreased.Brutal "special taxes" were imposed by the government in some sectors. The taxation of capital remains essentially unchanged, while a general financial transaction tax was introduced, rather than charging levies on speculative money flows.
In certain areas, it almost seems as if we have managed to separate income generation from pollution, as more income is generated by means of less pollution. At the same time, the environmental protection industry is weak and its services are modes. Organic farming is declining, spending on innovation is low. The number of employees in the green sector is low.
Employment statistics are improving due to public works schemes, but unemployment rate among the unskilledstill remains high. Employment figures among women and the elderly are growing, though large income disparities are still to be found. The overtime rate is still high, meaning that those with a job work too much. The country seems unable to get out of the unemployment trap.
Energy consumption in Hungary is decreasing slightly. Energy intensity levels are improving somewhat, but energy dependence remains high. Renewable energy production shows virtually no development at all, as the government consciously engages in a set of measures to thwart its growth, while immersed in crazed plans of constructing nuclear power plants. So we are missing out on the energy revolution taking place in the rest of world.
The way it distributed land lease contracts was probably the most corrupted and unjust measure of the government, securing positions for its the clientele. And now an even more scandalous measure is being prepared: the new tenants will also be able to buy the state-owned landsat discount prices.Discouraged by the government, organic farmingis not spreading. Organic livestock production is almost exclusively limited to national parks.