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Lower deficit target condition for IMF credit line

The International Monetary Fund asked Hungary's government to lower its 2009 general government deficit target from an earlier set 2.9%-of-GDP as a condition for its credit line, sources closed to the government told MTI.

To comply with the condition, the government lowered the general government deficit target in the 2009 budget bill to 2.6% of GDP.

The IMF also asked Hungary to give a quarterly account of the deficit and take the required measures if the pro rata targets are not met, MTI learnt.

Parliament's Budget Committee held a closed session on Monday to discuss the details of a combined €20 billion support package Hungary is receiving from the IMF, the EU and the World Bank. The committee was informed by Finance Minister János Veres and Central Bank (MNB) deputy governor Ferenc Karvalits of the details of the agreement, due to be signed on November 6.

According to earlier information, Hungary will be able to draw on the credit line at a rate of 5%-6% annually until the end of March 2010, and will pay a commitment fee of 0.25% over 17 months. (MTI – Econews)