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Hungary to raise 2010 GDP forecast

Hungary will raise its outlook for 2010 gross domestic product from its initial forecast of a 0.6% fall to a smaller contraction due to expected improvement in its export sector, its finance minister said.

“We think the export markets will perform better so there is a better outlook for the country,” Péter Oszkó told Reuters in an interview on the sidelines of investor meetings in London.

He said the revised forecast will be released next month.

“That does not mean growth (as Oszkó said originally), but at most a smaller contraction,” the finance ministry told Reuters later, clarifying the minister's comments.

Oszko also said Hungary would limit its foreign borrowing this year to the €1.5 billion target set out by its debt management agency to finance expiring debt.

“We want to focus on domestic issuance as we don't want to increase the government's foreign exchange debt,” he said.

At the height of the financial crisis in October 2008 Hungary resorted to a €20 billion financing package led by the International Monetary Fund.

But the country has stopped drawing on the financing after drawing down some €14 billion.

Hungary's debt management agency has hired Citigroup and Deutsche Bank to arrange meetings with fixed income investors in Europe and the US ahead of an expected global bond sale. (Reuters)