The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This paper focuses on the Stand-By Arrangement for Hungary under the Emergency Financing Mechanism. Economic indicators confirm that the downturn envisaged in the program is already under way. The new bank support law is important, as it provides Hungarian banks with access to capital enhancement and borrowing guarantee facilities. The gradual reductions in the policy interest rate have been appropriate. Looking ahead, continued implementation of policies in line with the program is essential to maintain investor confidence and minimize the depth of the economic downturn.