Gov't spending cuts much smaller than in mid-1990s
The Hungarian government's present belt-tightening measures will have a much smaller impact on the economy as a whole than the fiscal package carried out in the mid-1990s, senior economist at the Vienna Institute for International Economic Studies (WIIW) Sándor Richter told the press on Thursday. A recent study showed that the present cost saving measures will reduce public consumption by only 1% in the first twelve months after its introduction, while the package introduced in March 1995, known as the "Bokros package" for the Finance Minister at the time, cut consumption by 12%. Hungary cannot survive without the belt-tightening program, Richter said, adding that in a way this could be qualified as a return of the gifts that politicians have wrongfully offered to people over past years. He said the gross domestic product in Hungary had grown by 18 percent between 2001 and 2005, while real wages rose by 30 percent and pensions by over 30% in the same period. Richter said that in his opinion the earliest the euro could be introduced in Hungary was 2011, but 2012 or 2013 were more likely dates. (Mti)
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