2011 Hungary’s gross domestic product (GDP)

The International Monetary Fund (IMF) predicted that in 2011 Hungary’s gross domestic product (GDP) will grow by 2.5 percent, Christoph Rosenberg, chief of the delegation concluding an economic policy consult in Hungary told a news conference Monday.

This year, said Rosenberg, the IMF expects to see 1 percent GDP growth, 3.5 percent inflation and a surplus in the current account balance.

The delegation, in Hungary to explore the country’s current economic situation and its future prospects together with the government and the National Bank, said that in 2010 the country should be able to hold its deficit to 3.8 percent of GDP as envisaged. As far as its 2011 goal is concerned, expenditure cuts would also be needed, Rosenberg noted.

However, Rosenberg warned that while freezing transfers of pension contributions destined for private pension funds would improve the budget balance on short term, the move could backfire in the long run. It could undermine the Hungarian pension system, currently one of the most stable in Europe, he said.

The IMF has not yet been given the documentation on the attainability of the 2011 deficit target, but would receive it within the next few weeks, Hungarian National Economy Ministry State Secretary Andras Karman told the same news conference.

Hungary announced in July that it would not access the 3.7 billion euros still available as part of a 20 billion euro emergency bailout package it received in November 2008. Talks on revisiting that standby loan ended inconclusively in July and Hungary does not intend to reopen those negotiations. (PNA/Xinhua)

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