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EcoMin state secretary expects Hungary-IMF agreement in Q2

Hungary's government expects to conclude a precautionary financial-assistance agreement with the International Monetary Fund during the second quarter of this year, National Economy Ministry State Secretary Zoltán Cséfalvay told Reuters on Thursday evening.

Cséfalvay told Reuters that the expectations of some analysts that such an agreement would be reached only by the end of June were "too pessimistic."

Cséfalvay noted that "I have always said we would agree in the first quarter. Now it is March 1, so it would be rather difficult to say it will happen in the first quarter. Even though I think it is in the interest of all sides to reach an agreement as soon as possible, technically this will stretch beyond the first quarter." 

Cséfalvay told Reuters that the recent strengthening of the forint to below 300 to the euro reflected greater confidence in Hungary and is advantageous to the country from a budgetary standpoint. 

Cséfalvay remarked that the government has maintained its forecast of 0.5% GDP growth in Hungary this year, though added that "To judge whether we need a new path, we will need to see this year's growth outlook, the first-quarter data."

In response to a question regarding whether Hungary would wait to conduct a foreign bond issue until talks with lenders are concluded, Cséfalvay said ". . . it is more logical [to issue] after an agreement [with the IMF/EU], but on the other hand it must also be seen that in this market there is huge demand and when, what kinds of waves there are, it is reasonable to take that into account."

Cséfalvay did not exclude the possibility of tapping the markets earlier.

"What's happening is a slow rebuilding of market confidence, which takes quite a while as I see it. This will not happen overnight. I think part of rebuilding confidence is a deal with the EU and the IMF, which can manifest stronger confidence," Cséfalvay said, adding that "The Hungarian economy needs this."