Hungary’s corruption will impede economic development

Significance

That amounts to 8.7% of GDP. Abuse of public procurement due to cronyism has become an integral part of the Orban government, with the transfer of huge amounts of public funds and assets to loyalists. Although GDP growth last year is expected to have reached 6.5%, it has not led to any improvement in competitiveness or productivity.

Impacts

• In Central-Eastern Europe, the pandemic has directed much public spending to crony firms, in Hungary mainly in tourism and health sectors.
• EU member Hungary’s recovery plan is still under review for deficiencies in its anti-corruption framework, holding back EUR7.2bn (USD8.1bn).
• Some forms of petty corruption are decreasing significantly, mainly since Hungary criminalised informal payment for healthcare in 2021.