The IMF and EU delegations, which have just concluded a visit to Budapest, are "positive" about Hungary's measures to restore the country's fiscal balance over the past two years, Mihály Varga, the country's chief negotiator said in a statement on Monday.

Minister Varga noted the IMF's report had "outlined a clearly positive trend in terms of Hungary's public debt." The European Commission (EC) had also enthusiastically welcomed the country's measures to reduce that debt, he stated, adding that all these signs point to the EU lifting its excessive deficit procedure in 2013. He emphasised that Hungary's rate of employment had climbed back to pre-crisis levels and the economy's productive capacities had greatly increased during the past few months.

But it is also clear from the latest round of meetings that "the Government continues to hold a different view of the problems and how to resolve them," Minister Varga said.

Concerning the IMF's forecast of a budget deficit in excess of 3% this year, Minister Varga referred to the European Commission's forecast stating that the deficit would stay below the 3% threshold. The IMF had a difference of opinion with the EC rather than with Hungary, he added.

There is consensus within the Government that growth must be promoted, while the fiscal balance should be maintained, the Minister said. "We should insist on keeping the budget deficit below 3% in 2013", he added.

In December 2012, credit rating agency Fitch upgraded Hungary’s outlook in view of the country’s progress in cutting its budget deficit and stabilizing government debt. Fitch forecasted in a statement that Hungary would reach its target of a 2.7% GGD/GDP ratio in 2013, and will keep the ratio below 3% in 2014.

For the Government’s statement on the issue please see the document attached.

(Prime Minister's Office)