Heavy policy agenda early this week

HUNGARY - In Brief 16 Dec 2024 by Istvan Racz
Here is a brief inventory: 1. The Finance Ministry will cease to exist on January 1, 2025. It will be merged into the Economy Ministry. The related draft law is in parliament now. No surprise at all, this has been long known to the public, together with the essentially certain consequence that minister Márton Nagy will head both growth & development policies and fiscal policy from that point onwards. 2. Outgoing finance minister and upcoming MNB governor Mr. Varga appeared in parliament's economic committee today, which decided to support his appointment to head the central bank from March 4, 2025. Parliament's plenary session will vote on this. In essentially everything Mr. Varga said today, he stressed continuity, opening up no conflicts with the outgoing governor Mr. Matolcsy. This mainly referred to his commitment to the 3% medium-term inflation target and to the need for forint stability. He also said that elements of the MNB's prospective policy toolkit will have to be devised to keep harmony with interest rate policy. This was also in line with broad expectation. Mr. Varga introduced three colleagues, who are going to follow him in joining the MNB: his current state secretary for budget affairs, the head of ÁKK, and the head of MFB, the government's development bank. These people will most likely replace those members of the Monetary Council, whose term will expire in 2025 (three out of a total nine members, including the governor). Current vice governor Mr. Virág is expected to stay in the Monetary Council at least until June 2026, when his office term expires. 3. The main figures of the 2025 government budget are scheduled to be voted into law by parliament to...

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