BUDAPEST, March 6 (Reuters) - This year will be a grace period when Hungary still enjoys the positive effects of global growth and a turnaround of its own domestic economy but the world will change quickly, National Bank of Hungary governor Gyorgy Matolcsy said on Tuesday.
Matolcsy said further reforms and a shift to a capital-intensive model were needed to make Hungary’s economic development sustainable.
“This is a year of transition,” Matolcsy, a chief ally of Prime Minister Viktor Orban, told an economic conference, adding that a normalisation of global monetary policies and interest rates has already begun.
He also said the central bank’s rate cuts to a record low level has reduced debt service costs in the budget by 500 billion forints ($1.97 billion) in 2016, by 600 billion forints last year and is expected to bring further cost savings of 750 billion this year. ($1 = 254.16 forints) (Reporting by Krisztina Than and Gergely Szakacs)