IMF offers more money for Hungary

The IMF has floated the idea of doling out more cash to Hungary, but the government seems to think it’s managing just fine so far. Hungary has a €20bn facility with the fund, €8bn of which is being held in reserve.

Portfolio.hu quotes a Wood & Co. analyst Raffaella Tenconi as saying the country probably doesn’t need the money assuming the appetite for risk improves and Hungarian politicians don’t muddy the waters. Those are a couple of big “ifs”, to be fair, though Tenconi was primarily concerned by the latter. So much so that she seems to suggest a bit of cash for a rainy day wouldn’t be a bad thing.

“Fidesz rhetoric on the IMF recently has been somewhat confusing, suggesting they could push for a renegotiation of the terms, as they believe deep structural reforms are needed and the tight fiscal policy is counterproductive…”

In Tenconi’s view, arranging an additional €10bn in IMF financing by this fall, to be kept as a safety net, “would create an even stronger constraint on policy regardless of the party in the next government, helping a recovery in capital inflows in the second half of the year.”

She said, thought that “it remains to be seen whether the minority government will be able to arrange that, given growing discontent within the Socialist Party.”

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