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Bajnai vows no further cuts if GDP contracts more than 6%

Hungary' economy could contract more than 6% this year but the government no additional consumption cuts to offset the effect, Prime Minister Bajnai said on an evening television program.

Savings could come from government expenses, he said.

Hungary' economy could contract more than 6% but less than 7% this year, and will not grow next year either, the Prime Minister said, forecasting near stagnation for 2010.

The government plans no further measures to limit consumption, and will offset the larger than planned economic contraction from budget reserves if necessary.

Consumption cannot be cut more, the PM said, speaking against unreasonable spending cuts. He cited the reduction of the cost of the operation of the state, cutting red tape and on the operating expenses of the national railways MÁV as sources of eventual savings.

Decisions about the additional measures are expected in the second half of this year, Bajnai said. (MTI – Econews)