Hungary to resume talks with IMF for $18-bn credit line
16 Jul 2012
Hungary, a former Soviet ally and currently a member of the European Union (EU) is to continue its talks Tuesday with the International Monitory Fund (IMF) and the EU for a €15-billion ($18 billion) credit line to pay its debt and bond obligations in 2012.
The talks between government officials and the delegation representing the IMF and the EU are likely to continue for about a week.
In January, the IMF managing director Christine Lagarde said that the IMF needs to see tangible steps that show the authorities strong commitment to engage on all the policy issues that are relevant to economic stability before negotiating on a new loan arrangement for Hungary.
In late 2008, Hungary was reeling under debt following the global financial crisis and was rescued by the IMF, EU and the World Bank by arranging a financial package of $25 billion.
The country's economy registered a 6.8 per cent contraction in 2009 as a result of declining exports, low domestic consumption and fixed asset accumulation and the government's austerity measures.
Further to the reforms undertaken by the government in 2010, the economy began to recover in 2010 and registered a growth of 1.3 per cent in 2010 and around 1.4 per cent in 2011.