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Hungary needs new growth plan to avoid recession, PM says

Hungary needs a new growth plan because the country could sink into recession without the creation and implementation of such a programme, Prime Minister Viktor Orban said in a radio programme on Friday morning.

Mr Orban also said another speculative attack is to be expected against Hungary in mid-December.

Speaking of Hungary’s recent downgrade by Moody’s Investor Service to ‘junk’ status, the prime minister said "it is the season for" such things at the moment, a different EU member state is downgraded every week, "which sometimes hits us as well". Moreover, this is always accompanied by speculative attacks just as it happened in Hungary’s case, the prime minister said adding that in his expectations Hungary could face another speculative attack a few days after the middle of December.

In connection to the central bank’s interest rate rise, Mr Orban said he has always been against interest rate hikes because they are bad for the real economy, but he can accept that they can be necessary at times.

Speaking of the consultation between the national economy minister and the central bank governor on economic growth on Thursday, Mr Orban said this was necessary because it is impossible to raise the funds necessary to foster growth without the National Bank of Hungary (MNB).

The prime minister said the central bank and the government are "destined for cooperation in the modern world".

The MNB handles enormous amounts of money, which could be mobilized in the interest of economic growth. Thus, the national economy minister has to agree with central bank governor Andras Simor on the involvement of the huge reserves "lying dormant" in the central bank into economic growth, Mr Orban emphasised.

When asked how long the talks with the International Monetary Fund could take on the planned cooperation, the prime minister said "we could reach agreement in one day; as soon as we have reached our goals, we will agree, this is our plan".

Speaking of the fluctuation of the forint, the prime minister said "there is nobody who seriously thinks that this actually reflects the changing value of the Hungarian economy", adding that developments within the EU are driving the value of the forint, which influences the Hungarian economy.