Some of the steps Hungary's government has taken to consolidate the budget “are going in the wrong direction”, a top IMF official told Reuters.
“There are a lot of challenges and some things are going in the wrong direction in Hungary. There is a significant consolidation need,” Anne-Marie Gulde, who was in charge of Hungary's IMF-led bailout during the crisis, told Reuters on the sidelines of a conference in Vienna.
She called some of the government's measures, including the transfer of assets in mandatory private pension funds to the state pension pillar, “accounting measures only”.
“You still have the deficit because you still have to pay those pensioners. You can report it to Eurostat ... but if you take in the intertemporal view of the deficit given the demographic structure, you are borrowing from the future,” she said. “If you look at it in terms of a political business cycle it's another government that has to bear the costs,” she added. (MTI – Econews)