"After government measures that “broke taboos" during the first 75 days, we are now facing the challenge of making further key decisions in the next 6 to 9 months," Hungary's Prime Minister Gordon Bajnai said in an interview with weekly HVG. “On the one hand, what has been done so far will have to be included in the budget.Furthermore, cost must be cut on a massive scale of over HUF 100 billion at the local and central government level and in the long-distance public transport system in order to keep the country on a sustainable fiscal path."
Bajnai's statement is congruous with the findings of Tuesday's IMF report and the key areas identified by Finance Minister Péter Oszkó in an interview yesterday (without naming figures) where further fiscal restraint is needed in order for Hungary to reduce its fiscal deficit from 3.9% in 2009 to 3.8% next year. Recent news outline cost cutting on a HUF 40 billion scale at state railway company MÁV.
At the end of May, the inflation report of the National Bank of Hungary projected 4.5% fiscal gap in 2009 as a percentage of GDP. The HUF 100 billion size of the cost cutting plans outlined by Gordon Bajnai is in accordance with the central bank figures.
When asked about potential pressure for a pre-election spending spree from the Socialists, the Prime Minister replied: “What I can say for sure is that there will be no such thing as an “election budget". There is no question about it. It would not be realistic, and it also conflicts with the principles I follow. Hungary got into trouble due to the irrational promises that began every four years to promote political interests."
Source: Portfolio Online Financial Journal
03.07.2009