Hungary: we don’t need the IMF

"With Hungary in recession, waning demand from Europe for Hungarian exports and the weaker forint only adding to inflationary pressure, the central bank is unlikely to continue with any further rate cuts, Daniel Hewitt of Barclays reasons. As for the EU-IMF credit line, instead of striving to meet requirements, Orbán continues to insist that Hungary, with its much-touted 'unorthodox' economic policies, needs and deserves, different conditionality arrangements – a strategy that has proved, and continues to be, very time consuming and, as Hewitt points out, 'risks a rupture in the negotiations at some point.'

'So far, the government has benefited from strong demand for forint-denominated government securities and is therefore not under financing pressures from the market. If this were to change, the government would likely pick up the pace of negotiations,' he says. Meanwhile, the government seems unworried by budgetary pressures.

On Tuesday, as local media reported that Flextronics, the Singapore-based contract manufacturer, is to cut 600 jobs in south-west Hungary – the third round of layoffs in the past 10 months – György Matolcsy, minister of the economy, was insisting that the Ft300bn ($1.4bn) needed to fund the government’s job creation scheme next year would be made available regardless of any outside pressure. No 'international organisation' could change government policy in this regard, he said."