IMF, EU call on Hungary to keep tight fiscal policy

10:40, February 16, 2010      

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Experts from the International Monetary Fund (IMF) and the European Union were satisfied with Hungary's economic situation on Monday, but warned a tight fiscal policy was still necessary.

Barbara Kauffmann, head of the EU delegation, told a news conference that Hungary was economically stable and on the right fiscal course.

However, IMF delegation chief James Morsink warned the country needed to take additional measures to reduce its national debt, from more than 80 percent of its GDP to 65 percent within the next five years.

Morsink also noted that Hungary was laying the groundwork for an economic recovery. He predicted that the country's economy would grow by more than 3 percent in 2011 after a projected 0.2-percent decline this year.

The experts also met with representatives of the Fidesz party, which is widely expected to win the parliamentary elections on April 11, Morsink said.

Fidesz officials said they were ready and willing to retain the tight fiscal policy introduced by the government, and would cooperate with the IMF, according to Morsink.

Hungarian Finance Minister Peter Oszko said his country had revised the GDP forecast in 2010 to a 0.2-percent decline from an earlier estimate of a 0.3-percent contraction.

The IMF, the EU and the World Bank loaned 20 billion euros (25.1 billion dollars) to Hungary in November 2008. To date, the country has used more than 14.2 billion euros of the stand-by loan.

Source: Xinhua
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