PM says ‘understands’ need to cut spending

Analysis

Hungarian Prime Minister Ferenc Gyurcsány said he ‘understands’ the need to cut spending while raising taxes to balance the country's budget.

Gyurcsány, who on June 10 unveiled his plan to cut Hungary's budget deficit, has been criticized for relying too heavily on tax increases, which threaten to spark inflation and slow economic growth. The country's deficit is the European Union's largest deficit when compared with the size of the economy.

“Long-term and sustained balance requires structural reform,'' Gyurcsány said at a meeting with business and trade union leaders in Budapest on Thursday. The first step is toward raising revenue but in the next year and a half that will be amended with substantial structural reforms.''

Gyurcsány reiterated a plan to reduce the budget deficit by Ft 350 billion ($1.6 billion) this year and said he wants to reduce the gap by more than Ft 1 trillion forint each in 2007 and 2008. The shortfall will reach 8% of gross domestic product this year, even after the measures.

Hungary will aim to save on central administration, healthcare system, education and state price subsidies to natural gas, electricity, drugs and public transport, Gyurcsány said. Reform has already started in state bureaucracy and the government will tackle education “within weeks,'' he said.

He pledged to take on public transport this year and start overhauling the healthcare system and pensions. Hungary won't curb pension spending and family support and some form of housing subsidies will remain for those most in need, Gyurcsány said. (Bloomberg)

 

ADVERTISEMENT

Credit card fraud causes HUF 322 mln of damages in Q2 Figures

Credit card fraud causes HUF 322 mln of damages in Q2

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

BFK developing regional cycling strategy City

BFK developing regional cycling strategy

SUPPORT THE BUDAPEST BUSINESS JOURNAL

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.