Analysis of Hungary’s Fiscal and Monetary Responses to the Economic Impact of The Russian–Ukrainian Conflict

The escalation of the Russia-Ukraine conflict in 2022 has had serious and lasting economic consequences for Europe, particularly for energy-dependent countries. This study aims to explore the economic shocks triggered by the conflict and to examine the fiscal and monetary policy responses of EU Member States, with a special focus on Hungary. The research highlights the dilemmas of crisis management caused by inflationary pressures, surging energy prices, and exchange rate fluctuations, as well as the possibilities and limitations of fiscal and central bank instruments. The paper discusses the economic impacts of the conflict, the fiscal and monetary policy responses, and the challenges of coordinating these two policy areas. The research is based on domestic and international literature, macroeconomic data series, reports from the Hungarian National Bank, and relevant policy documents. The paper concludes that while these responses have mitigated some of the crisis’s effects in the short term, a longer-term redesign is required to achieve a sustainable economic policy balance. The coordination of fiscal and monetary policy, especially for small open economies, will be a key issue for future crisis management.
Keywords: Russian-Ukrainian war, economic crisis, fiscal policy, monetary policy, inflation, energy prices, Hungary