Impacts of the Global Crisis: Special Focus on Central Europe and Hungary
Impacts of the Global Crisis: Special Focus on Central Europe and Hungary

Summary/Abstract: The Central and Eastern European countries outside the Euro area were hit particularly hard by the global credit crunch; their previously fast growth was replaced by a recession, putting their catch-up as part of the integration process into a completely different context. The crisis has made it clear for some of the Central and Eastern European newcomers that growth cannot be maintained based on generous inflows of capital. The abundant international liquidity that marked the years before the crisis vanished, FDI in the region plunged dramatically, and the drying-up of the government bond market imposed extremely tough limits on the external funding of budgetary overspending. The crisis hit Hungary especially hard as this country was already at a low growth path after the 2006 stabilisation package.

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