World Bank voices doubts

Of the 10 new members that joined the European Union in May 2004, the majority of the eight former communist bloc countries plan tight budgets for 2005. Hungary, however, is expected to again exceed its public budget deficit target for this year, says the latest report on the region by the World Bank. “Budgets for 2005 point to further fiscal consolidation where most needed, but concerns remain in particular about the large deficit and weak fiscal management in Hungary,” the report says. Without improvement in budgetary discipline, and the building in of additional safeguards, Hungary risks failing to meet its planned deficit target of 4.7% of GDP in 2005, the World Bank says. As stated in the analysis, World Bank experts believe that, with the exception of Slovakia, reforms have slowed in the new EU member countries. The report notes that consolidation of the state budget is the most encouraging in Poland, where this year a 2% of GDP deficit reduction is planned. In summation, the World Bank concludes that the economies of the region have grown, drawing attention to the above average growth in the Baltic states in particular.