In its annual review of the Hungarian economy published on Thursday, the IMF acknowledges that Hungary has significantly reduced its vulnerability. The Fund forecasts a 2 per cent growth in 2014, but warns that medium-term growth prospects remain subdued. The report welcomes the government’s efforts to reduce the deficit, noting that the steps taken to keep government spending under control can reduce public debt without slowing down economic growth.

The IMF highlights that the National Bank was successful in easing inflationary pressures while at the same time cutting the base interest rate to a record low. Although bank lending is still weak, the IMF takes note of the National Bank’s cheap loan programme, but calls for clear communication on monetary policy to boost confidence.

This time, the IMF has given a very positive review of Hungary, and there is no sign of the doomsday scenarios hinted at in previous reports, Anna Szabó comments in Magyar Nemzet. The conservative columnist suggests that the IMF had to bow to economic indicators and join the European Commission and the OECD in acknowledging that the Hungarian government has successfully overcome the crisis and put the economy on a growth path.

The positive developments are reflected in the latest ranking of the fDi Magazine published by the Financial Times, which named Budapest as the most attractive city for capital investment in Eastern Europe in 2014-2015, Szabó adds. She notes that another reason for the positive report is that the IMF is realizing the importance of Central and Eastern Europe as bulwarks in the Ukraine crisis. In an aside, Szabó finds it sad that the left-wing media has had very little to say about the positive IMF report.

Source: BudaPost

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