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2013 draft budget might be too optimistic

June 16th, 2012

A right wing columnist suggests that the 2013 draft budget figures to be submitted to Parliament might be too optimistic, although they had been intended to reassure the markets. A left wing pundit thinks Economy Minister György Matolcsy’s attempt to refute an article published in The Economist is damaging to Hungary’s reputation.

In Magyar Hírlap, Csaba Szajlai welcomes the attempt to stabilise Hungary’s image by finalizing the 2013 budget figures as early as mid-summer. For that same reason, he suggests, the concerns raised by analysts at Capital Economics in London should be heeded. Their analysis describes Hungary as extremely vulnerable, as its output is highly dependent on international demand. The good news is that Hungary may, after eight years in the pillory, finally free herself from the excessive deficit procedure, if she succeeds in keeping the deficit under 3%, even if at the cost of introducing new taxes. The growth forecasts by the Ministry for National Economy take an IMF credit-line agreement for granted. If we are in such a hurry to accept the 2013 budget so early, we had better speed up the negotiations with the IMF as well, Szajlai concludes.

In an ironic piece in Népszabadság, Endre Aczél asks if Matolcsy actually believes it is enough to publish a white paper on his ministry’s web page to refute The Economist’s unfavourable assessment of the Hungarian economy. According to Aczél, “Good News on the Danube” – as the paper is called, see BudaPost, June 11th, 2012) – does not sound convincing. How can we say, he asks, that Hungary “has achieved” a 3.5 percentage reduction of its national debt when that target number is still to be reached – by the end of 2013? Can Matolcsy really believe that international actors cannot see how costly the financing of Hungary’s public deficit has become? Will they become convinced by his paper that there is no need for an IMF agreement for the Hungarian currency to stabilize? Matolcsy’s paper is an embarrassment, one more opportunity to laugh at Hungary, he contends.

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