Hungary’s welfare spending cuts and tax changes hurt the poorest and most vulnerable, which may lead to social tension and make their implementation more difficult, said Iryna Ivaschenko, the International Monetary Fund’s representative in Budapest, reported Bloomberg.
Hungary’s spending-cut plans represent a “180-degree turnaround” from Prime Minister Viktor Orban’s initial policies when he assumed power last year, Ivaschenko said.
She added that although IMF supports the aim of increasin the activity rate, policies that cut welfare speding and tax reform mainly impact the lowest earners, according to a transcript of the interview posted on Hirszerzo’s website. Ivaschenko believes that such actions could create social tension, making the program’s implementation more difficult.
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