Hungary, Romania, Bulgaria suffer historic slumps over virus

Hungary, Romania, and Bulgaria have suffered their worst quarterly downturns in decades because of the pandemic, according to official data published in the 3 European Union (EU) members on Friday, August 14.

Hungary’s gross domestic product (GDP) plunged 14.5% in the year’s 2nd quarter compared to the first 3 months of 2020, the worst since the communist era ended more than 3 decades ago.

Second quarter GDP fell 12.3% in Romania and 9.8% in Bulgaria, the biggest fall since the 1997 economic crisis.

In Hungary, the new coronavirus crisis impacted services as well as industry, the KSH national statistics office said. The quarterly drop of 13.6% year-on-year exceeded analyst forecasts. 

“The goal is for the Hungarian economy to return to its pre-crisis path as soon as possible and to achieve again growth of around 5% next year,” a Finance Ministry statement said.

Hungary forecasts a 3% contraction of its GDP for 2020, while Romania expects a drop of 3.8% and Bulgaria of 7%.

The European Commission is counting on a 6% to 7% fall for these countries, which remain among the EU’s poorest but whose economies have recorded relatively strong growth in recent years within the bloc.

In Romania and Bulgaria, exports dropped by 18% and 23.4% respectively in the 2nd quarter.

Romania on Friday announced a 14% increase in retirement pensions from September, with household consumption a growth engine.

The public deficit is expected to reach 8.6% by year-end. – Rappler.com