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Járai faults convergence plan for insufficient budget cuts, tax rises

The government’s slack fiscal policy in recent years has made the forint one of the most vulnerable currencies in the world, which pays the highest premium compared with other currencies in Central Europe, Central Bank (MNB) governor Zsigmond Járai said at a conference organized by the Hungarian-German Chamber of Industry and Commerce. Járai said there was no room for any base rate cuts in the next few years as long as inflation stays above 3%, which he said would probably still be the case in 2008 contrary to government plans. Járai expects an inflation rate of 6% this year, 7% in 2007 and about 4% in 2008. He also slated the government’s convergence plan for offering no appropriate solutions to the country’s gaping deficit and rising unemployment, and for being too hazardous due to lack of public support. (Népszabadság)