As a result of the fresh, new approaches taken in economic policy, significant economic convergence occurred in Hungary in the past decade, and a sustainable internal and external balance was also achieved. Thus, the formula of “balance and growth” was applied successfully for the first time in the last hundred years. Consequently, Hungary faced the coronavirus pandemic and its economic effects with a strong immune system, and the recovery was rapid. However, even as the crisis subsides, work remains to be done: we need to restore balance and implement a turnaround in competitiveness to redirect the economy back to a sustainable path. In the competitive environment of the 21st century, economies which are able to harness emerging international megatrends by accentuating their own strengths will be the winners. Over the long term, Hungary can be among these winners, by correctly assessing the changing forces and using them to our advantage, while continuously strengthening competitiveness factors.

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Measures introduced worldwide in response to the COVID-19 pandemic have brought with them the potential for a crisis to develop. A crisis, by its nature, will pose a challenge to all of us. However, a challenge will also create opportunities to implement a qualitative change. This article presents the challenges the State Audit Office has faced during the COVID-19 pandemic, as part of its day-to-day work and when analysing the effects of the pandemic. Restrictions on personal contacts have induced organizational changes and integrity risks have increased. In response to these challenges, organizational changes have taken place, covering aspects such as work organization and digitalisation. The State Audit Office has introduced new types of audits to increase audit coverage, thereby contributing to a reduction in increased risks of corruption, and thus to the functioning of a well-governed state. The SAO has produced an increased number of analyses on public finance to serve as a basis for its advisory activities intended to help achieve the goals of the Government. In budget management, the concept of resilience had to be reinterpreted and the aim of ensuring fiscal balance had to be subordinated to the financing of measures to strengthen the resilience of the economy as a whole. A new challenge is posed by the fact that, concurrently to efforts for restarting the economy, steps must also be made to consolidate the balance of the budget.

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The study analyses the reasons for and extent of the differences in lending trends in Hungary in the wake of the 2008 financial crisis and the Covid-19 crisis. In 2008, the lack of monetary and fiscal room for manoeuvre, coupled with the lack of a macroprudential framework and the unhealthy lending structure exacerbated the banking sector’s procyclical behaviour and caused a credit crunch, deepening the economic downturn. When the Covid-19 crisis occurred, however, Hungary had a significantly sounder macroeconomic and lending structure, and a complex, developed macroprudential framework. All of this helped to underpin credit dynamics during the economic downturn. The large volume of guarantee and loan programmes and the payment moratorium played a pivotal role in this positive outcome, which was also supported by macroprudential measures maintaining the lending capacity of banks.

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The aim of the study is to examine the new challenges posed by the pandemic and the tools to manage them in the field of integrity. The spread of the novel coronavirus parallelly caused a surge in the demand in certain sectors, as well as a shortage of supply and the disruption of global supply chains. During the pandemic, healthcare workers had carried out their tasks under the pressure of an excess demand stronger than before, which increased the risk of corruption in the sector. Corruption schemes known beforehand have veered and the pattern of integrity risks have changed. Under the extraordinary circumstances, organisations might be obliged to choose between saving lives immediately and complying with the rules. The study points out that careful consideration is needed with regard to which rules can be neglected and which ones shall be maintained. Both positive economic incentives and sanctions have played a role in the management of integrity risks occurring in this field. The salary increase of medical doctors and sanctions related to offering and taking informal payments are important steps in the direction of strengthening integrity that clearly demonstrate the need for combined actions.

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The COVID-19 pandemic has also weakened the Hungarian economy's performance and fiscal balance, but the negative effects can be assumed to be temporary for the time being, due to the previously stable public finances. Hungary has implemented a successful fiscal reform and consolidation between 2010-2019, which provides a good basis for defending against the crisis. At the same time, the pandemic has put even more focus on improving the competitiveness of the Hungarian economy, containing inflation, keeping the fiscal balance within an appropriate range and increasing the scale efficiency of the small and medium-sized enterprise sector. The paper presents the framework of fiscal and central bank measures during the crisis, while also pointing to the challenges for the post-crisis period stemming from the international environment, and in particular from the changes in central bank policies.

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In the battle against the COVID-19 pandemic, our country reacted immediately and is now implementing a coherent and coordinated defence strategy. It indeed means the synchronised activity of health care organisations, military, police and disaster management forces as well as territorial public administration bodies. It closely concerns the social field and educational directorate, however protecting the economy is also greatly focused on. Government offices on (district) county level as state public administration bodies of general competence carry out a number of tasks during the times of defence against the pandemic. Initially, they were assisting in handing out protective equipment for the health care sector, making pandemic-related decisions, implementing the testing of social institutions, teachers and health care staff and executing economy protection measures. Following the availability of vaccines, the responsible county working groups are organising the scheduled vaccination activities. The study presents in detail the activities of the Government Office of Békés County in the fight against COVID-19, besides just carrying out its core tasks.

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