Hungary : Fifth Review Under the Stand-By Arrangement, and Request for Modification of Performance Criterion

This paper discusses key findings of the Fifth Review Under the Stand-By Arrangement for Hungary. All end-December 2009 quantitative performance criteria, the continuous performance criterion on nonaccumulation of external arrears, and the indicative target on central government debt were met. The structural benchmarks on government lending to banks, passage by parliament of amendments strengthening the remedial powers of the Hungarian Financial Supervisory Authority (HFSA), and submission of amendments strengthening the bank resolution framework were also met. Further strengthening of policies is required to ensure macroeconomic stability and growth over the medium term.