Hungary's austerity without growth isn’t working

The raft of amendments to Hungary’s 2013 budget announced late last week contained not only fresh austerity measures, but also amended contentious policies that had previously been an obstacle to an IMF deal. As such, it has received cautious approval from the markets. But at the same time, the very fact that the government has introduced a further fiscal squeeze is an acknowledgement that austerity without growth isn’t working, and we expect a significant overshoot of the budget deficit target next year.