Economy
Hungary cenbank Governor says budget gap causes forint volatility
"The main problem of the Hungarian economy is the lack of discipline in the public sector budget and the huge budget deficit," Reuters quoted Járai as saying.
"This causes that state debt grows, interest rates are high... and this has made the exchange rate volatile."
He added that items currently not accounted for in the government's official state budget figures would make state debt as high as 68% of GDP this year instead of around 60% in official data.
In a report issued last autumn the central bank said its base-case scenario was for a debt of 63.3% of GDP for 2006, while the pessimistic forecast was 66.3%. The government's target, adjusted for private pension fund payments and rejected by Brussels, was for a debt of 53% of GDP.
Járai also said welfare spending relative to GDP was too high, adding that the government should reveal this information to the public.
“[...] This includes unemployment benefits, social and child benefits...," he said, adding that the there were too many employees in the public sector and tax collection was not strict enough.
"We need to influence politics and the public opinion in a way that this situation is appropriately showed rather than remaining hidden."
"This causes that state debt grows, interest rates are high... and this has made the exchange rate volatile."
He added that items currently not accounted for in the government's official state budget figures would make state debt as high as 68% of GDP this year instead of around 60% in official data.
In a report issued last autumn the central bank said its base-case scenario was for a debt of 63.3% of GDP for 2006, while the pessimistic forecast was 66.3%. The government's target, adjusted for private pension fund payments and rejected by Brussels, was for a debt of 53% of GDP.
Járai also said welfare spending relative to GDP was too high, adding that the government should reveal this information to the public.
“[...] This includes unemployment benefits, social and child benefits...," he said, adding that the there were too many employees in the public sector and tax collection was not strict enough.
"We need to influence politics and the public opinion in a way that this situation is appropriately showed rather than remaining hidden."
