Hungary To Maintain Ties With IMF - Econ Min
03.09.10, 12:15 Uhr
BUDAPEST -(Dow Jones)- Hungary intends to maintain ties with the International Monetary Fund but has no plans for a new standby loan agreement, Economy Minister Gyorgy Matolcsy said Friday.
"We're talking to the IMF, we ask for technical help and constantly conciliate viewpoints," Matolcsy said at an event organized by the Hungarian Employers and Industrialists' Alliance. "We want to finance the country's debts from markets. Hungary's financing is currently secure."
Hungary received a joint standby credit line of EUR20 billion from the IMF and the European Union in 2008 when the country was hit hard by the economic crisis. Talks between the government and the bodies collapsed mid-July as the government rejected further austerity measures in exchange for access to the last tranche of the loan. Hungary didn't draw on its credit line this year but has been able to finance itself from the market.
Although Hungary's debt to gross domestic product ratio is the highest in the region, at around 80%, the country is different from Greece, Ukraine or Romania, Matolcsy said. "We are committed to decreasing the ratio [and] we're also most willing to pursue a tight fiscal policy."
Hungary's official budget deficit target for 2010 is 3.8% of GDP, which the government has reiterated its commitment to.
The country's new economic policy will focus on boosting economic growth and increasing employment in the coming years, Matolcsy said, although not with fiscal tools, rather by a more efficient enhancement of EU-sources, and by structural reforms in the next two years. "To fulfill this program, we need to get back the confidence of international investors, local industrialists as well as households," Matolcsy said.
Hungarian economic policy also needs to reflect the possibility of slower-than-expected global recovery and the a risk of another slide into recession, he said. "We will need to be prepared for a global double-dip recession."
The new center-right Fidesz government won a landslide victory at general elections in April, and is expected to publish a detailed economic program pursuing growth after municipal elections Oct. 3.
Hungary received a joint standby credit line of EUR20 billion from the IMF and the European Union in 2008 when the country was hit hard by the economic crisis. Talks between the government and the bodies collapsed mid-July as the government rejected further austerity measures in exchange for access to the last tranche of the loan. Hungary didn't draw on its credit line this year but has been able to finance itself from the market.
Although Hungary's debt to gross domestic product ratio is the highest in the region, at around 80%, the country is different from Greece, Ukraine or Romania, Matolcsy said. "We are committed to decreasing the ratio [and] we're also most willing to pursue a tight fiscal policy."
Hungary's official budget deficit target for 2010 is 3.8% of GDP, which the government has reiterated its commitment to.
The country's new economic policy will focus on boosting economic growth and increasing employment in the coming years, Matolcsy said, although not with fiscal tools, rather by a more efficient enhancement of EU-sources, and by structural reforms in the next two years. "To fulfill this program, we need to get back the confidence of international investors, local industrialists as well as households," Matolcsy said.
Hungarian economic policy also needs to reflect the possibility of slower-than-expected global recovery and the a risk of another slide into recession, he said. "We will need to be prepared for a global double-dip recession."
The new center-right Fidesz government won a landslide victory at general elections in April, and is expected to publish a detailed economic program pursuing growth after municipal elections Oct. 3.
Ministry website: www.nfgm.gov.hu
DJG/dok
