Hungarian stocks have reversed an early fall today as the government pledged a corporation tax cut, which would give the country the lowest rate in the European Union.

Hungarian officials said the corporate tax rate would be lowered to a flat 9% next year at a cost of 145 billion forints (€470.2 million).

It is difficult to calculate the impact as several one-off items allow companies to reduce the tax, which is now 10%, and 19% on amounts above 500 million forints, analysts said.

The Budapest Stock Exchange's main index reversed an early fall after the announcement as blue chips rebounded.