The financial action group, one of a number of groups established by the government to manage the fallout from the pandemic, is drawing up several crisis scenarios, state secretary of the Finance Ministry Gábor Gion said in an interview published in business daily Világgazdaság.
Speaking of revitalising the economy, Gion said “it could take at least 18 months to fully rebuild economic processes”, adding that “previously established solutions may not work”. “Strong dependence on external resources at the macroeconomic level and minimal stockpiling at the micro level can make countries and businesses highly vulnerable”, he said.
Answering a question about why the government decided to keep the deficit target below 3%, Gion said: “We are working with different scenarios, including the possibility that the restrictions could last until the end of this year.” “At the same time, a deficit of below 3% is achievable according to the currently likely scenarios,” he added. “If a different situation arises, for example, if we see that new steps are needed in addition to measures already taken, then the deficit target should be reviewed.” He added that he considers it a good approach to keep to fiscal discipline even in bad times rather than hastily pouring money into the economy.
“A more accurate picture of what scenarios we are thinking in terms of will emerge from the convergence report to be sent to the EU at the end of April,” Gion said.
Answering a question as to whether the government plans to impose special taxes on further sectors, in addition to banks and retailers, he said: “There are no such plans at the moment, but this also depends on how the economic recovery will proceed.”