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Hungarian economy to contract by 2-3pc in 2009, PM says |
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Wednesday, 14 January 2009 |
The Hungarian economy may shrink by 2 to 3 percent this year as against the 0.9 percent decline fixed in the state budget approved in December, Prime Minister Ferenc Gyurcsany told public television on Wednesday morning.
As the prospects of the world economy are essentially gloomier than what was projected last autumn and inflation will be slower than previously expected, all plans have to be revised, the prime minister said.
Gyurcsany said Hungary would not abandon its efforts to reduce the budget deficit but otherwise none of its financial targets were set in stone.
The prime minister, who held talks with Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF) on Tuesday, ruled out any general tax cut, saying it would be a bad answer to the challenge of growth. Instead, he stressed the need to launch a medium-term tax reform, focussing on reshuffling tax burdens.
Speaking of the main fields of changes, Gyurcsany mentioned employment, taxation and welfare benefits, stressing the need to cut central spending.
The prime minister said he was confident that he could canvas sufficient support both within his Socialist Party and in Parliament.
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