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FINANCE MINISTER: TOURISM TO BE HIT BADLY BY CORONAVIRUS OUTBREAK

 

Hungary’s tourism and hospitality sectors are expected to be hit severely by the new coronavirus outbreak, Finance Minister Mihály Varga said. In an interview with commercial Inforádió, Varga said already up to 40-50% hotels bookings have been cancelled as European and Chinese guests stay away. “It will be a good result if [the sectors] come out of this at break-even,” he said. Depending on the severity of the outbreak, the government expects Hungarian economy to grow by 3.7% or possibly see negative growth of -0,3% in 2020, Varga said. He noted that the 2020 budget was drafted based on the assumption of economic growth of 4%. Reserves and the deficit were each planned at one percent of GDP, he said. The reserves, some 490 billion forints (EUR 145.8bn) in absolute terms, can be used in emergencies, he said. However, this may prove insufficient should the crisis extend to multiple sectors, he added. The government has asked companies to assess the effects of the virus in various sectors so it can prepare specific measures, Varga said.
Other countries have so far only activated tools to avoid company insolvencies, he said. The Hungarian finance ministry is looking at steps to be taken should the outbreak merely slow down the economy, and others in case of a deep crisis, Varga said. It will react to the real needs of economic players and protect the achievements of the past ten years, he said. Some private citizens may find it difficult to pay back loans, Varga warned, and he advised caution in taking out new loans.