Interview with András Balatoni

The Faculty of Business and Economics of the University of Pécs has a talented alumni line-up full of outstanding names who are inevitable in their profession. Many have achieved success in the competitive sector, others are involved in academic work and many have proven themselves in public administration. András Balatoni is the summary of these three. We talked with him about his memories of Pécs and what he learned at his alma mater.

WHEN YOU HAD TO DECIDE ON YOUR FURTHER STUDIES, YOU CHOSE UPFBE. WAS IT A GOOD DECISION?

I think so and there were several factors that played a role in the decision. On the one hand, I am a native of Pécs, I was born here and it was my home until I graduated from university. On the other hand, Pécsiközgáz already had a good reputation, and two of my cousins studies here, so I was able to get into the university environment even as a high school student. And, of course, opportunism: in high school, I did quite well in maths and history, which I had to take. After all, it would have been rather strange if I hadn't applied to FBE of UP.

How good a choice was it? With 15 years of macroeconomic background, I head the Economic Forecasting and Analysis Directorate at the National Bank of Hungary. I am also the head of the macroeconomic column of the Közgazdasági Szemle (Economic Review) and a member of the board of the Economic Policy and Theory Section of the Hungarian Economic Association. Professionally, I don't think I have ever wanted more.

WHAT ARE YOUR MEMORIES OF YOUR UNIVERSITY YEARS, WHAT WOULD YOU HIGHLIGHT FROM YOUR PROFESSIONAL AND SOCIAL EXPERIENCES HERE?

I loved going to university. I really enjoyed the challenging subjects like maths, microeconomics, statistics, econometrics, operations research. At the time, I was specialised in regional economics, where Attila Varga taught us cutting-edge economics. But I was also very motivated by hard core methodological classes as well, such as evolutionary algorithms with István Borgulya, game theory with Zoltán Varró, or scheduling problems in project management with György Csébfalvi.

I always felt that I could study something special, do something special within the walls of the university, what was going on in there was really cutting edge, and I could cross my fingers that I had such great teachers and that I could attend university here.

DO YOU REMEMBER WHY YOU TURNED TO THEORETICAL ECONOMICS? WHAT OR WHO INSPIRED YOU IN YOUR CHOICE OF DISCIPLINE?

I had the privilege of studying two semesters of microeconomics and one semester of growth theory with Professor István Bessenyei, which was the best intellectual adventure of my university years. When I was in my final year, I was invited to do a PhD in two departments, but it was clear to me that macroeconomic issues, economic policy theory, practice and empiricism were the most attractive - so I stayed at FBE of UP. The econometric knowledge that I received from József Pintér played a very important role in this choice.

WHAT EXACTLY IS YOUR AREA OF EXPERTISE AND WHAT DOES YOUR WORK CURRENTLY CONSIST OF?

We are responsible for macroeconomic analysis and forecasting within the National Bank of Hungary. 25-30 people work at the Directorate, so my role is primarily managerial, to ensure that colleagues with the right information, organisational and infrastructural background, resources and motivation are able to prepare the material that decision-makers want to see, read and hear. Of course, you need to know the business too, but my job is primarily to put my colleagues in a position to score the goals. And they always score, because I have a very, very good team.

HOW DID YOU GET HERE, WHAT WERE THE IMPORTANT STAGES AND WHAT EXPERIENCE DID YOU GAIN?

After university, I started my career at ECOSTAT, which was a macro-economic research institute under the ministry of the Prime Minister’s Office. I spent an interesting three years there, met great economists, statisticians, saw in real life the econometric models we had studied at university working, or often not working.

In 2010, Tamás Mellár invited me to join the then-forming Századvég Gazdaságkutató Zrt. We had a small but very enthusiastic team of people who were extremely committed to the academic pursuit of economics. When Tamás left the company, I took his place, and so in the summer of 2011 – at the age of 28 - I became Research Director. I can't be grateful enough to Peter Heim and Gáspár Várkonyi for supporting my ambitions. Of course, I was greatly helped by my friend Csaba G. Tóth, who started with me at ECOSTAT on the same day, but I managed to lure him to Századvég. It was also a very productive period for me academically, I started writing articles for the Economic Review and the professional work at the company started to get a better and better reputation.

Then in 2013 I received an offer from ING Bank Hungary Branch, which was a completely new challenge. Part of the novelty was that I got much closer to the markets, I saw who was buying or selling forints and government bonds and why. The media became a particularly important part of my work, with hundreds of interviews a year. During this period, my forecasts proved to be very good, I earned second and third place in the Reuters-MNB joint competition out of more than 30 forecasters over three years. Partly because of this performance, the phone rang one day and I received an irresistible and extremely honourable offer from the Nationall Bank of Hungary...

YOU HAVE A COMPLEX AND RESPONSIBLE JOB. WHAT DO YOU THINK ABOUT YOUR JOB, THE MNB'S ROLE IN THE ECONOMY AND HOW THE CENTRAL BANK CAN RAISE SOCIAL WELFARE?

Modern central banking practice is based on the inflation targeting system. According to this system, the primary task of the central bank is to achieve and maintain price stability. It is no coincidence that our most important publication is the Inflation Report. In it, we have to explain to economic agents why prices are rising the way they raise and what the parameters are that will bring the inflation rate back down to the target level over the 5-8 quarterly time horizon that is relevant to us. This is necessary because inflation is partly a psychological phenomenon: if many people think there will be inflation, there will indeed be inflation, so the process becomes a self-fulfilling prophecy. However, if we argue convincingly and our economic policies reflect our commitment to anti-inflation, then although inflation will fluctuate in the short run, in the long run the centre of gravity of the process will remain the inflation target, which in our country's case is three per cent. If the inflation target is achieved and maintained, we will of course support the government's economic policy of growth and employment, but a clear hierarchy of targets is very important. The MNB is also one of the first to have been given a 'green' mandate, which means that our role now extends to supporting the ecological sustainability of economic growth.

 YOUR CAREER PATH AND YOUR MULTIPLE ROLES SO FAR JUSTIFY THE QUESTION: DO YOU PLAN TO PLAY A BIGGER ROLE IN ACADEMIC SPHERE OF YOUR WORK?

I am happy to take on lectures at FBE of UP, but I also have classes at other universities. I am also a member of the steering committee of the cooperation between MNB and BME, Budapest University of Technology and Economics. I am also involved in the MIT Regional Entrepreneurship Acceleration Program, I do some proofreading from time to time, so I wouldn't say I don't have any academic role. Of course, work and family keep me very busy at the moment, so that's all I'm looking for at the moment, but who knows what the future will bring. I'm not ruling anything out!

FINALLY, WHAT MESSAGE WOULD YOU GIVE TO CURRENT APPLICANTS ABOUT WHY THEY SHOULD CHOOSE FBE of UP AND WHAT THEY CAN LEARN FROM YOUR CAREER?

Study, because it is worth it! Make the most of the time you spend at Pécsiközgáz! Ask questions, be open and interested in your profession!

The previous issues of the Közgazdasági Szemle, Statisztikai Szemle or Szigma are all available, accessible and readable for free, but it means a lot if you read portfolio.hu regularly. In addition, I would of course recommend the MNB's Facebook account and YouTube channel to everyone. And finally, enjoy the fact that you are young, in a beautiful city, on a beautiful campus.