Impossible to say when Hungary will join eurozone, Járai says


Nobody can say when Hungary will be prepared to adopt the euro under the current circumstances, National Bank of Hungary (NBH) president Zsigmond Járai told a meeting of the American Chamber of Commerce on Thursday.

"The market believes the euro could be introduced (in Hungary) in 2013-2014, but there are still many question marks," Járai said. One thing is certain, though, that the government's convergence program will not lead to the eurozone, Járai said. He added that Hungary would need at least four years to meet the Maastricht criteria for adopting the euro, even with an effective convergence program.

Járai conceded that Parliament's approval of the draft 2007 budget would show the government's commitment to fiscal discipline, but the rate of state redistribution of Hungary's GDP would still increase next year. Speaking about Hungary's inflationary outlook, Járai said that even though the central bank's inflation target is out of reach for now, monetary policy conditions are sufficiently tight at the moment as inflation is expected to come down to the bank's price stability target in 2008. "Current monetary conditions are strict enough, the forint is strong enough," Dow Jones quoted Járai as saying.

The next meeting of the central bank's MPC is scheduled for December 18. Most analysts expect it to leave the base rate unchanged at 8.00%. Járai said the bank remains focused on price stability, which it defines as a 3% mid-term inflation target, despite missing that target this year and next year. Although much is still unsure, inflation is expected to peak around 8% in the first half of 2007, then drop to an annual average 4% in 2008. The MPC is determined to tighten monetary conditions if it sees that chance in danger, he added. "The central bank is trying to have a strict monetary policy, if needed, to achieve that goal," Járai said. (Mti-Eco)


4iG to Spin off Space Industry, Tech Business Analysis

4iG to Spin off Space Industry, Tech Business

EUR 6,000 in EU Funding Open to SMEs EU

EUR 6,000 in EU Funding Open to SMEs

Poland Industrial Output Rebounds in January Manufacturing

Poland Industrial Output Rebounds in January

Number of Chinese Tourists in Hungary Quadruples From Pre-CO... Tourism

Number of Chinese Tourists in Hungary Quadruples From Pre-CO...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.