In the first half of 2012 the Hungarian economy got into recession. It further deepened in the second half of this year due to the drought. Consumption, investments and lending are all plummeting. The financial position of the majority of companies is deteriorating.
Hungary is lagging behind the EU in economic terms and is becoming isolated from the EU as far as its economic policy is concerned. In the first half of 2012 the Hungarian economy got into recession. It further deepened in the second half of this year due to the drought. Consumption, investments and lending are all plummeting. The financial position of the majority of companies is deteriorating. Hungarian financial market indicators improved following the easing of the European debt crisis and the start of the IMF negotiations. However, inflation is accelerating strongly. Owing to the risk of the continuation of the excessive deficit procedure, significant adjustments of the 2013 budget are unavoidable. The successful conclusion of the negotiations with the IMF and the EU remains questionable. The government does not seek agreement, and it even makes these international organizations appear as if they would pose a threat to the sovereignty of Hungary. Only the sharp deterioration in financing conditions may force a quick agreement. Thus, even if an agreement is reached, no substantial improvement in economic trends can be expected in 2013 compared with this year.
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