Convergence program falls short of Maastricht criteria even in 2009

Initiatives

A draft of the government's convergence program to be presented to employers and unions later in the week projects Hungary's general government deficit will be 3.2% of GDP in 2009, still over the 3.0%-of-GDP target required to meet the Maastricht criteria for adopting the euro. The program, presented by Prime Minister Ferenc Gyurcsány at a press conference on Tuesday, projects accrual-based general government deficits of 11.6% of GPD in 2006, 6.8% of GDP in 2007, 4.3% of GDP in 2008, 3.2% of GDP in 2009 and 2.9% of GDP in 2010. Expenditure cuts are expected to account for 80% of the targeted reductions, with increased revenue making up the rest. The 2006 figure excludes fiscal adjustment measures approved in June. However, including these, the deficit would narrow to 10.1% of GDP excluding the effects of pension reform, and to 8.6% of GDP including these effects. This effect will gradually be phased out by 2010.

The program projects state debt, without any exclusion, will rise from 71.5% of GDP in 2007 to 72.7% of GDP in 2008, after which it will fall to 70.9% of GDP in 2009 and 68-69% of GDP in 2010. The program puts GDP growth at 2.2% in 2007, 2.8% in 2008 and 4.1% in 2009. Almost all of the figures are identical to those taken from a leaked draft of the convergence program and published by dailies on Friday. Gyurcsány said the government would meet to discuss the program with unions on Wednesday and with employers on Thursday, after which the program will become official. The program deals with the period between 2006 and 2011, Gyurcsány said. It outlines steps to create balance between 2006 and 2009, and the conditions for creating growth between 2009 and 2011. Gyurcsány said Hungary could meet the technical requirements for joining the ERM-2 in 2007-2009. He added that Hungary could join the ERM-2 without meeting all of the Maastricht criteria. (MtiEco.hu)

ADVERTISEMENT

Job ads in hospitality, tourism sector grow drastically  Analysis

Job ads in hospitality, tourism sector grow drastically 

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.