Convergence program to put economy in nosedive

The convergence program initiated by the prime minister will put the economy into a nosedive instead of boosting growth to solve the budget deficit, said opposition Fidesz economic policy pundit György Matolcsy, addressing a crowd in downtown Kecskemét, central Hungary. Speaking at an open-air rally, Matolcsy called for tax cuts, job creation, accelerated economic growth, and incentives to local businesses as ways to solve the country's economic woes. He called the package introduced by PM Ferenc Gyurcsány “a government error” saying that the Hungarian economy was much worse off than what could be resolved with the austerity package. He accused the government of hiding the size of the budget deficit and projected that GDP growth would decline to near zero were the program implemented. Ratings agency Standard & Poor's projects big slowdown in Hungary's economic growth rate in 2007. S&P's on Tuesday said Hungary's economic growth rate is likely to drop to 2.5% in 2007 from a projected 4.2% in 2006. The projection, contained in S+P's latest report for the region, says growth will slow "as the government undertakes drastic fiscal retrenchment to curb a burgeoning budget deficit." (Econews)