Original title: Credit rating agencies likely to react to Hungary repaying IMF loan ahead of schedule – state secretary

Hungary recorded the largest expenditure on research and development since the change of regime in 2012, said Zoltán Cséfalvay, state secretary at the Economy Ministry. He told InfoRadio on Thursday that R&D spending totalled 1.29 of gross domestic product last year, as businesses, especially large corporates have understood the importance of R&D. He also spoke about the “early” repayment of the debt to the IMF.

The state secretary stressed that the most important task is to help businesses get from an initial idea to building up their company and making their product.

The government has decided to repay its outstanding EUR 2.2 billion debt (from a credit taken out in 2008/2009) to the International Monetary Fund (IMF) by 12 August. The central bank (NBH) has cleared its EUR 721 m debt to the Fund on 6 August. In this respect Cséfalvay underlined that this also indicates the healthy state of the budget.

Hungary to repay IMF debt in three currencies on Monday.
He noted that he does not expect an immediate market reaction to the repayment. Asked whether credit rating agencies will respond he said yes, they will.

Cséfalvay expects the outlines of the 2014 budget to be visible around the end of August or early autumn. He added that stability, i.e. the reduction of public debt and a budget gap below 3% of GDP may be ensured, but programmes aimed at boosting employment must also be continued. Asked whether the cabinet will deploy new means Cséfalvay replied that we have to wait with that until 30 September, the deadline for the creation of the budget draft.

Source and read more: Portfolio. hu