Govt projections for 2012 based on optimistic script, says state sec (adds IMF)

Budapest, September 29 (MTI) - The government s macroeconomic projections for 2012 are based on an optimistic script, thus the government will have to prepare calculations in the autumn that allow it to react quickly if the situation changes, Prime Minister s Office state secretary Mihaly Varga told a meeting of economists on Thursday.

The government projects GDP growth of 1.5 percent in the 2012 budget draft, Varga said at the 49th conference of the Hungarian Economists Society, confirming earlier announcements.

The government targets a 2.5 percent of GDP public finance deficit and expects a current account surplus of 3.7 percent of GDP. It puts average annual inflation over 4 percent.

Fiscal Council chairman Zsigmond Jarai told the meeting that next year s budget targets are achievable and realistically low.

The budget draft submitted to the Fiscal Council assumes a realistic macroeconomic path, Jarai said at the conference.

Although Hungary is not at the centre of the crisis, it remains extraordinarily vulnerable, thus it is necessary to accelerate structural reforms, he said.

On the sidelines of the conference Varga told the press that Hungary had no plans to seek a new stand-by loan from the International Monetary Fund, news agency Reuters reported.

He said Hungary had covered its foreign currency issuance plans for 2011 in the first half of the year. If market conditions are right, some foreign currency debt issuance earmarked for 2012 may be brought forward.

"We have three months left (of the year). I am not an oracle ... but it may happen. We will see how the international situation unfolds, whether it will be worth to come out with it," Varga said.