Hongarije zal onderhandelingen met IMF hervatten (en)
The Hungarian economy ministry confirmed on Tuesday (24 August) that Budapest will resume talks with the International Monetary Fund i over the country's loan program in the autumn.
"The negotiations will likely continue in the autumn and an agreement will be reached," the economy ministry told Bloomberg in an email statement. Talks between the two sides collapsed in mid-July as a result of serious disagreements over Hungary's attempt to win greater leeway from international lenders in ratcheting down its budget deficit in 2011.
"It wasn't a collapse of negotiations, it was just the end of a round of talks," the ministry said. What is likely to be the content of any agreement was not specified.
The EU i is also to take part in the negotiations.
The IMF i, for its part, confirmed an ongoing interest in talks with Hungary. "We continue to engage with the authorities with a view to bridging remaining differences," the Fund's spokesperson said in a statement quoted by Reuters i. The IMF did not specify a timeline for negotiations.
The talks ended last month after Hungarian Prime Minister Viktor Orban i said there is "no point in negotiating long-term questions with the IMF" and refused to agree with further cuts in government's spending, required by the IMF and the EU for further financial aid.
Hungary's current €20 billion loan with the IMF agreed in 2008 expires in October, just as municipal elections are to take place in the country.
The news helped the forint, which had lost more than two percent last week, to regain its losses, but increased the yield demand by investors for local government debt, which rose for the first time since 29 July.
The Hungarian central bank said Monday that it did not know about the plan to return to international loan talks. "I have no knowledge of any initiative from the government's part to relaunch the talks," bank's governor, Andras Simor, said at a press conference Monday.
The central bank also raised its inflation forecast for this year while lowering its growth estimates for the next two years.
The country's GDP is expected by the central bank to grow by 0.9 percent this year, with annual inflation at 4.7 percent. The projection for GDP growth in 2011 was lowered to 2.8 percent from 3.2, while inflation is estimated to be 3.5 percent, up from a three percent forecast.
According to the bank's projections taking into account austerity measures already imposed, the government deficit should reach 4.3 percent of GDP in 2010, 4.1 in 2011 and 3.7 in 2012.
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