“There are no dates yet for the negotiation mission to return to Budapest,” the IMF’s representative in Hungary, Iryna Ivaschenko, told Reuters news agency.
“As we stated before, we believe that the focus of fiscal adjustment should be on achieving a more balanced consolidation, shifting away from ad hoc tax measures,” Ivaschenko said.
She added that this would help reduce the budget deficit in a sustainable manner and, when combined with structural reforms, generate higher growth. “Several of the measures announced last week are not aligned with these objectives,” Ivaschenko said.
Mihaly Varga, the government’s chief negotiator in talks, said on Friday that an agreement with the IMF was possible, but on grounds that Washington and Brussels accept the government had “its own concept, its own programme.”
Varga dismissed press reports earlier in the day that talks with international lenders had broken down.
The Fiscal Council’s head Arpad Kovacs said earlier in the week that Hungary must strike a deal with the IMF/EU to manage public debt. Potential savings on the cost of financing with an IMF loan were in the hundreds of billions of forints, he said.
London-based analysts said though the IMF did not like the Hungarian government’s recent measures, especially the extension of the bank tax and the doubling of a financial transactions tax next year, a deal was still likely in the first quarter of 2013.
The economy minister announced fiscal adjustments worth over 700 billion forints (EUR 2.5bn) this month in order to keep to agreed deficit targets, which critics say could stifle growth.
Hungary is seeking a 15-billion-euro precautionary credit line from the IMF.