Hungary in IMF deal

The Hungarian government, similar to its Ukrainian and Icelandic counterparts, have struggled with the effective implementation of introducing tighter fiscal measures and have applied to the International Monetary Fund (IMF) for a loan as part of an economic rescue package.

The currency has fallen by almost 20 percent in the last month alone and that has caused investors to become very nervous as the former eastern European block was seen as a safe emerging economy, although the current situation indicates otherwise.

With the currency in freefall and the financial markets in meltdown as a result of the global crisis, the IMF and Hungarian government have had to act.

Following a consultation with the European Union, the programme focus will be on stabilising the financial sector and aiming to improve long term growth.

Analysts, however, have given a mixed response to the deal as it is expected to boost business confidence and aid further capital inflow, although the temporary and emergency nature of the deal does seem to be a cause for concern.

The IMF have yet to disclose the size of the emergency package, however it is speculated to be in the region of around $10 billion.

The Hungarian Prime Minister, Ferenc Gyurcsany, said that it is a positive measure and its shows the country’s solidarity as it can rely on friends to help protect it.

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