HARSH CRITICISM FROM FITCH RATINGS

The economic policy of the Hungarian government has been harshly criticized by the greatest institute of credit assessment in Europe. Ed Parker, regional director of Fitch Ratings said to Magyar Nemzet the Hungarian economy was characterized by untenable budget deficit targets, modified dates of euro adoption and a large spending spree before elections.

According to Ed Parker the former date of 2010 for joining the eurozone had been viewed with scepticism for a long time and the recent report of Eurostat, the different accounting gimmickries and the slippery budget indicated the probable adoption of the euro in 2013. In connection with the increasing state deficit Mr Parker warned of the dependence of Hungary on foreign investors as the high deficit was mainly financed by their purchases and the loss of their trust might cause the weakening of the forint. Fitch Ratings devaluated the forint debts of Hungary in this January because of its budget and state deficit problems but the fcorecasts are gloomy in the respect of debts in hard currency, too. The European Centre of ICEG also forecasts an increasing budget and state deficit in spite of Premier Gyurcsány’s promises for the contrary though János Kóka, Minister of Economy claimed even yesterday that all conditions were set for the adoption of the euro in 2010 because inflation was low, the forint was strong, and Hungary was the most competitive country in the region.

Translated by Péter Szentmihályi Szabó