Hungarian government to pump $7 billion into economy

Wednesday 19.11.2008 (6 weeks ago)
Hungary :: Property News

Hungary’s Socialist government has decided to pump an unprecedented $7 billion into its economy, in order to stimulate greater economic growth and ensure that the country avoids the worst of the current global economic crisis.

Gordon Bajnai, Hungary’s economy minister, has put forth a plan that would offer small and intermediate businesses a major financial boost through various aid programs, so as to ensure that unemployment does not increase by significant proportions over the course of the next two years.

According to the most recent statistics, the national unemployment rate now stands at around 7.7 percent. Additionally, a report in The Guardian newspaper suggested that Prime Minister Ferenc Gyurcsany’s government is also looking at ways to streamline the funding process for those small businesses looking to tap into funds provided by the European Union.

Hungary’s primary goal is to join the euro zone as soon as possible and enjoy the security offered by the common European Union currency. In order for this to happen, the government must ensure that the deficit is lower than 3 percent of the country’s GDP and it must also keep inflation down.

It does appear as though Hungary is succeeding with these two tasks. The deficit currently stands at around 3.4 percent, but the government now expects this to be closer to 2.6 percent by late next year. This means that Hungary would be permitted to join ERM II, which is widely seen as the threshold to the euro zone.

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