7 March 2024
The Magyar Nemzeti Bank (MNB) has published its ”Sustainable GDP - Global discussion paper“ at a ceremonial international book launch event. The main message of the book is that the economy needs a sustainability turnaround and new metrics to monitor this turnaround. GDP has been the most important economic indicator of the 20th century, but what is needed is a compass that reflects the state of and changes in environmental, social and financial sustainability along the traditional dimensions of economic development. The Magyar Nemzeti Bank joins the international effort to develop new indicators with the new ”Sustainable GDP - Global discussion paper“.
The book is based on the theses of Governor György Matolcsy, whose starting point is that in order to achieve the sustainability turnaround, we need to renew measurement as well as the theoretical approach. But there are no widely accepted measures of sustainability and sustainable development. The Magyar Nemzeti Bank’s new global discussion paper aims to help measure sustainable economic growth in a way similar to “New Sustainable Economics - Global discussion paper” which set down the conceptual foundations for the sustainability turnaround.
Barnabás Virág, Deputy Governor of MNB cited the thesis of György Matolcsy during his lecture: ”The new economics needs new metrics”. A sustainability turnaround requires not only a new theoretical approach, but also new indicators, therefore GDP needs to be renewed. The current GDP indicator does not keep pace with the character of the 21st century and therefore needs to be complemented with more dimensions. The intellectual turnaround of sustainability cannot take place without a widely accepted headline indicator that is consistent with it, follows the vision of the theory and measures the achievement of the derived objectives.
Deputy Governor, Barnabás Virág, summarised the main messages of the ”Sustainable GDP - Global discussion paper“. The first part of the book presents the limitations of GDP in measuring sustainability and well-being and the efforts that aims to overcome them. The second part of the book sets out two new alternative ways of measuring sustainability-enhanced GDP. According to the numerical estimate of the sustainable GDP, in the 2010s the Hungarian economy achieved significant growth not only in terms of traditional GDP, but also in sustainable GDP as a result of the innovative reforms implemented at the beginning of the decade, which simultaneously ensured the maintenance of economic balance and growth. The decade of 2020 is the age of dangers and great transitions. The character of the decade is completely different from the previous ones. Global epidemics, the energy crisis and the geopolitical reorganization affected the European economy, including the Hungarian one, at sensitive points. They overturned the previous balances and worsened the conditions for sustainable growth. For the sake of sustainable development and catching up, a complete turnaround in competitiveness is therefore necessary in both Europe and Hungary, which includes the acceleration of the green and digital transition and all measures that permanently increase the economy's ability to create value.
Barnabás Virág, as one of the authors and the co-editor of the book, thanked all the experts and authors contributing to the publication of the discussion paper for their dedicated work, and called the professional cooperation that led to the publication of the book exemplary. In addition to the coordination of the Magyar Nemzeti Bank, experts from the Hungarian Central Statistical Office, the Budapest University of Technology and Economics, the John von Neumann University and the Pázmány Péter Catholic University also contributed to the preparation of the discussion paper.
The presentation was followed by a roundtable discussion with Gergely Baksay, Executive Director, MNB, Raekwon Chung, Board Director, Ban Ki-moon Foundation for a Better Future, Lilla Sarolta Bánkuty-Balogh, Master Lecturer, MNB Institute, John von Neumann University, Gábor Bartus, Secretary General at National Council for Sustainable Development and András Balatoni, Director, MNB.