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IMF Criticizes Hungarian Government

Published: January 28, 2013; 23:36 · (Vindobona)

According to IMF, the economic outlook for Hungary is rather gloomy.

IMF Criticizes Hungarian Government / Picture: © Vindobona.org

Today, the IMF delegation has published a report on Hungary´s economic policy in Budapest. The delegation has analyzed the country´s economic data in the last two weeks.

According to the report, Hungary´s government changes its fiscal policy very often. The government interventions are becoming more and more unpredictable, the delegation criticizes. “In order to protect the own citizens, the government has imposed extraordinary taxes on multinational companies and banks.”

Above all, the delegation is in doubt whether the country is able to overcome the recession. Moreover, the public debt level cannot be reduced sustainably at the moment, the delegation said. This is mainly due the wrong economic and fiscal policy, the delegation stressed. Without a sustainable reduction of public debt, the excessive deficit procedure cannot be stopped, however.

At the moment, Hungary´s public debt level comes at 78% of GDP. Due to the revaluation of the forint, the debt-to-GDP quota was down by two percentage points last year. Nevertheless, a further reduction is not possible, IMF underlines.

In the next three years, Hungary´s economic outlook is rather decent. IMF expects a GDP growth of 0% this year. In 2012, Hungary´s economy shrank by 1%, economists say. Until 2016, GDP growth will not exceed 1.5%. Due to the high inflation rate, real wages have been falling for years.

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