Hungary's government and central bank officials outlined measures, including cutting government spending, to mitigate the country's risks in the current global financial crisis at a meeting in Budapest at the weekend.
The Hungarian Prime Minister Ferenc Gyurcsany expressed hope that 'ongoing investments would not have to be suspended' during a meeting of some 60 top lawmakers, ministers, central bank chiefs and trade union leaders to work out a short-to-medium term action plan to tackle the financial turmoil.
Hungary, feeling the effects of the global financial crisis, last week received a €5 billion loan from the European Central Bank. In an unprecedented move outside the euro zone, the ECB came to Hungary's aid to help it combat a financial crisis that experts attribute to panic and speculation.
'Hungary's economy has grown stronger over the past few years and although vulnerability remains it has lessened and the country enjoys the support of institutions such as the European Commission, the European Central Bank and the International Monetary Fund,' central bank governor Andras Simor said.
'There is practically zero chance of a national bankruptcy in Hungary,' he added.
But investors have nonetheless made known their concerns. The Budapest stock exchange has shed half its value and the national currency, the forint, has lost more than 10% against the euro.
Hungary, which joined the European Union in 2004, saw its deficit ratio balloon to a record high 9.2% in 2006. But thanks to austerity policies, the public deficit narrowed to 3.4% of output by 2008. Economic growth in 2008 is expected to come to 2%.