PM says 2010 will be “tough” year, says employment recovery to lag

Although Hungary’s economy may restart growing in the second half of 2010 and the IMF prognosticated a 4 percent GDP growth for 2011, the next year will be “very tough”, Prime Minister Gordon Bajnai said at the Budapest Corvinus University on Tuesday.

The employment rate may start to improve in four to six months after the beginning of an economic recovery, he said in a lecture.

Bajnai attributed to low employment, bad political compromises and the trap of catching up with the advanced countries that the global crisis hit Hungary more severely than the average.

Hungary’s employment rate of 57 percent, one of the lowest in the European Union, means that hardly more than half of the adult population is working legally, he said.

Bajnai criticised politicians for making a series of bad compromises to grasp or keep power and bringing economic growth to a halt by increasing the rate of redistribution.

The prime minister said that Hungary should abandon the bad habit of taking out foreign loans. The country should continue to pursue the sober-minded economic policy it adopted under the constraint of the global crisis, he said.