Government statements on Covid-19, unemployment, GDP growth and fiscal plan

HUNGARY - In Brief 26 Mar 2020 by Istvan Racz

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In recent days, the MNB appeared as the dominant player in public appearances, but it seems now that the government is taking back the initiative. In fresh news, cabinet minister Gulyás estimated the number of those who had already lost their jobs at 30-40 thousands, which is 0.7-0.9% of total employment. He added that April will most likely be even worse and that the total job loss due to the disease may eventually reach at least 100000 and maybe even substantially more. He also added that the government expects the epidemic to reach its peak (whatever that means) around June or July.Asked if the government was planning to lengthen the current maximum period of three months through which unemployment benefits are paid, the minister said no, as the government is aiming at bringing everyone back to work within the next three months. This statement appeared to be in conflict with the expectation regarding the length of the epidemic. However, he said that the government cabinet is preparing to review and most likely extend the list of those activities, for which employees and employers have been relieved from tax and social security payment obligations. This did not sound very convincing, given that he did not speak of any substantial widening of the currently rather narrowly set activity list. And anyway, a relief from the payment of taxes which could not be collected anyway will not be able to restore former employment levels. However, Mr. Gulyás said the government is not planning to pay extraordinary benefits to a large part of the population, as some other countries are preparing to do.Mr. Gulyás also added that he trusted the MNB's most recent forecast, yet he belie...