Orbán: govt's growth target will be ‘extremely difficult’ to achieve

The Hungarian government considers it moral and appropriate that burdens be distributed between businesses, the state and households, and this stand has determined its economic measures until now, Prime Minister Viktor Orbán said in a presentation at the London School of Economics on Thursday.

Orbán said Hungary’s decision to replace the "generosity" of the IMF with market financing was a "very risky decision" but a good one, as evidenced by the experiences of the past year.

Asked about a possible downgrade of Hungary’s sovereign rating, Orbán said Hungary’s government was using a mix of conventional and unconventional means, and among these were some that did not win the admiration of analysts and ratings agencies. But the results of these measures can already be seen, he added.

Orbán said ratings agencies completed reviews in Hungary in October and would probably announce the results at the end of November.

Orbán said economic growth was expected to be weak in Europe’s biggest economies - Germany and France - next year, and it would be "extraordinarily difficult" for Hungary to achieve a 1.5-2% pace of growth when other countries were far behind the mark. This is why the Hungarian government has to draw up a growth plan, which is what it mandated the economy minister to do at a cabinet meeting on Wednesday, he added. It is hoped the plan will be announced within one or two weeks, he said.

"With regard to foreign projections that put Hungary’s economic growth at around half a percent in 2012, Orbán said action had to be taken in the same manner as the government had dealt with the country’s state debt.

"The same thing was said about state debt, that the level of state debt [to GDP] rose over 80%, and Hungarians could not stop the increase, but we stopped it," he said.

This year’s fiscal deficit was good because of the restructuring of the pension system, and next year’s deficit will be good because the healthcare system will be rationalized and all forms of wasted state spending will end, Orbán said.

There is always a solution, but the results depend on whether the leadership of a country is capable of planning and implementing the necessary measures, he added.