"Unorthodox" housing policy in Hungary: Is there a way back to public housing?

Abstract

The global economic crisis had a severe impact on the Hungarian economy at the end of 2008 due to the high public deficit and large FX debt/GDP ratio. Hungary had to take out emergency loans from the IMF and introduced measures such as cutting government expenditures (housing subsidies, pensions, etc.) and levying special taxes. The interim Hungarian government launched an austerity program that consolidated the budget and brought down the deficit to 3.8 % of GDP by 2009. After the election in 2010, the new government, which received 53 % of the votes and has two-thirds majority in Parliament, introduced unorthodox economic measures, provoking widespread discussion and criticism both in Hungary and abroad. The economic basis of this policy is a modified neo-Keynesian economic policy that tries to boost economic growth through state expenditures or tax cuts. The unorthodox economic policy aims to restore economic growth and fiscal balance without austerity measures.