November 12th, 2012

Fiscal Council head says foreign investment vital for capital-starved Hungarian economy

Although Hungary’s chances to catch up with mainstream Europe have improved over the recent years, the low rate of investment to GDP is a major obstacle which can only be surmounted through the involvement of foreign capital, Fiscal Council chief Arpad Kovacs said in Budapest on Saturday.

From among the CEE countries, Hungary has the lowest investment-to-GDP rate, which will have a negative impact on fiscal revenues, he said in a lecture at Budapest’s Wekerle Sandor Business School.

Differences in the scale of values adopted by multinational companies and Hungarian small and medium-sized enterprises pose another obstacle to narrowing the gap, he said.

Kovacs attributed it to a shortage of ideas worth funding and a lack of appropriate markets that many Hungarian SMEs have no access to loan.

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