IMF CRITICIZES HUNGARY

The recent annual report of IMF harshly criticizes Hungary because of the high budget and current balance deficit which creates tensions in the economy.

According to IMF the increasing inflation is also problematic, it is partly due to the exaggerated wage raises of the previous year. In December 2003 the Hungarian inflation rate was 5,7 pc while the budget deficit was 5,9 pc of the GDP in spite of the plan of 4,5 pc. The improvement of the payment balance and the cutting of hight interest rates can be achieved only by determined budget restrictions and the Hungarian currency must be protected against market fluctuations.

Translated by Péter Szentmihályi Szabó