IMF says focus will be on Hungary’s 2011 budget

BUDAPEST (BestGrowthStock) – Hungary’s 2011 budget will have to be based on durable fiscal measures that reduce the deficit further and the government must start implementing these steps this year, the IMF’s mission chief told Reuters on Saturday.

Christoph Rosenberg, who led the Fund’s delegation to Hungary in talks which were suspended on Saturday, also said that Budapest would not be able to draw on funds from its current financing package until the program review is concluded.

The government needed to take steps to plug a gap equal to 0.3 percent of GDP in this year’s budget. “That residual (gap) should really be the opportunity to start implementing the kind of durable measures that will be needed to get to next year’s fiscal target,” he said.

“By definition when we come next time, unless we come next week, the government will have made more progress on the 2011 budget and that will be a very important budget.”

The IMF and European Union suspended on Saturday the review of Hungary’s funding programme, set up in 2008 to save the country from financial meltdown, which the government now uses as a safety net for its borrowing on financial markets.

Rosenberg said the IMF has not discussed the possibility of a new financing deal for 2011 and 2012 for Hungary.

“We are aware of what has been said in public but in our meetings we didn’t really get to that point, because we obviously needed to first resolve the policy issues and those have not been resolved.”

(Reporting by Krisztina Than; editing by David Stamp)

IMF says focus will be on Hungary’s 2011 budget