IMF should be realistic about Hungary deficit-Kosa

The IMF should be realistic when considering a deficit target for Hungary for 2011, ruling Fidesz party vice chairman Lajos Kosa has told public television m1.

When asked in an interview whether lenders’ expectations for Hungary to cut its deficit to 2.8 percent of GDP next year from a target of 3.8 percent in 2010 was too strict, Kosa said:

“It is obvious that Hungary’s situation is one of the most difficult of all member states in European Union. In such a situation, expecting us to run the lowest deficit …. they can say that, but this will not work.

“The IMF must be mindful to remain grounded in realities.”

A review of Hungary’s Ä20bn IMF/EU funding agreement signed in October 2008 was suspended on July 17 after lenders failed to get sufficient clarity of the new centre-right Fidesz government’s future economic policies.

Prime Minister Kosa told public television that Hungary, which has been under the EU’s excessive deficit procedure since joining the bloc in 2004, would at some point cut its deficit below three percent of GDP but declined to say when it would do so.

“We will achieve this and this is our intention,” Kosa said. “As to what numbers next year’s budget will contain, that will be revealed only when we submit it (to parliament in October).”