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London-analysts on Sunday’s referendum in Hungary

Emerging market experts in London see no long-lasting negative effects of the referendum held on Sunday, although the risk of a less stringent fiscal policy has grown.

A fiscal deficit similar to the 2006 crisis is most unlikely, but the decrease of the gap will be slower than planned by the government, Crédit Suisse analyst Olivier Desbarres said. The result of the referendum brings no “good news” for the markets, because it creates new risks in a period when global factors are already troubling, he added. The adjustment program of the government is not too popular, so some kind of correction will happen before the 2010 general elections, PNB-Paribas analyst Michel Dybula agrees, but without any dramatic steps that could further hamper the already weary confidence of investors towards the Hungarian market. The currency may weaken in the next days, but the long-term outlooks of the Forint are not negative, being the current accounts and the net-FDI-inflow are on the mend. The near dismissal of PM Gyurcsány is hardly to be expected, analysts agree, in case of a further decrease in governing socialist party’s popularity, however, the chances may grow. (Gazdasági Rádió)