Another official statement on fiscal measures arrived this morning

HUNGARY - In Brief 06 Apr 2020 by Istvan Racz

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Just as promised a few days ago, PM Orbán made another statement on further details of the upcoming Covid-19 fiscal action plan. Following the logic of the new extraordinary legal rule, under which the cabinet can govern the country by issuing decrees during the existing emergency situation, he made the statement in the form of a brief online speech, rather than appearing in the National Assembly. In the backstage, three cabinet ministers were standing: innovation and technology minister László Palkovics, whose mandate will be to coordinate the implementation of the plan, minister Andrea Bártfai-Máger, responsible for securing the participation of publicly owned companies, and finance minister Varga, mandated to take care of the financial side of the plan.Once again, Mr. Orbán's speech was unexpectedly short, about five minutes long only, which was clearly insufficient for the delivery of much detail. What we have learned is the following:- The whole plan will affect about 18-20% of annual GDP (HUF 9-10k billion). This is clearly not the size of the intended fiscal measures (it would way too big for that), but a heavily grossed up figure that includes the amounts affected by the now existing debt moratorium (for enterprises and households, running through end-2020, possibly affecting HUF 3000 bn of bank loans and credits, the equivalent of 6% of GDP), some HUF 2000 bn (4% of GDP) of banks loans, to which the government would provide interest subsidies and guarantees, and actual fiscal measures. - As for the latter, these would include government support to fixed investment, in an amount of HUF 450bn (1.1% of GDP). The latter most probably will be the amount of the rela...