Jan. 6 (Bloomberg) -- Hungary needs a “strong policy framework” and a “sound mix with strong ownership from authorities” for an international loan, Figyelo reported, citing an International Monetary Fund report it said it obtained.
“Such external support, which has been requested by the authorities, will only be available and effective to the degree it is based on a strong policy framework and a sound policy mix with strong ownership,” Figyelo said, citing an IMF staff report from an Article IV consultation and a post-program monitoring discussion dated Jan. 4 of this year.
“If underpinned by a strong policy framework, a precautionary Fund arrangement could relieve some of the constraints cited above. By increasing potentially available reserves and anchoring a stability-oriented policy mix, a Fund supported program in concert with other international lenders, may help to relieve financing constraints and improve investor confidence,” according to the report.
The report will form the basis of the IMF board’s discussion on Hungary on Jan. 18, Figyelo said. The report has been sent to the Hungarian government, which may add to it, the weekly said.
The report’s recommendation include strengthening central bank independence, fiscal policy oversight, changing the tax regime, cutting extraordinary industry taxes, and reorganizing public transport companies, Figyelo said.
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