Based on the budget structure approved for 2010, Hungary’s 3.8pc-of-GDP general government deficit target for next year is realistic, IMF delegation head James Morsink said at a press conference on Monday, after the delegation completed a review.
The IMF would not tolerate a 7pc-of-GDP general government deficit mentioned as a possibility next year by main opposition party Fidesz, Mr Morsink said. “We met with Fidesz leaders who said the deficit could rise to 7pc, but as we see it, the 3.8pc general government deficit is achievable in 2010,” he added.
The deficit could rise over 3.8pc in a worst-case scenario, he said, adding that there are indeed risks.
The European Union is satisfied with Hungary’s consolidation of the general government, said Barbara Kaufmann, a representative of the European Commission.
The EU also sees that the call-down of the remaining EUR 1bn from Hungary’s EU loan will not be necessary for the time being. The money will be available for later use, Ms Kaufmann said.
The IMF welcomes steps Hungary is taking to strengthen the country’s financial system and give its financial market watchdog greater power, said Iryna Ivaschenko, who heads the IMF office in Hungary. Hungary’s bank system is stable and its capital adequacy ratio exceeds the legally required amount, she added.