Hungary’s Finance Minister Calls for Prudence on Budget Policy

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Hungary needs to maintain a conservative fiscal policy and avoid excessive spending to prepare for headwinds facing the global economy, according to Finance Minister Mihaly Varga.

The nation should stick to its plans to narrow a budget deficit to 1% of economic output next year from a planned 1.8% in 2019, Varga told a conference in Nyiregyhaza, eastern Hungary.

Any talk of a balanced budget or excessive spending will hurt predictability and stability in times of a changing external environment, he said, highlighting the importance of a stable exchange rate after the forint weakened to a record low against the euro earlier this week.

“Prudence needs to be the guiding principle for policy,” Varga said.

The Finance Minister’s comments come as policy makers consider the need for measures to prop up the European Union’s fastest growth rate. Speaking at the same conference on Thursday, central-bank Governor Gyorgy Matolcsy called for broad-based stimulus, without mentioning specific steps.

©2019 Bloomberg L.P.

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