This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7676559.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Fears as Hungary warns on growth Fears as Hungary warns on growth
(about 10 hours later)
Hungary has cut its growth forecast for 2009, as concerns grow about the impact of the global credit crisis on the East European country's economy. Hungary has cut its growth forecast for 2009, as concerns grow about the impact of the global credit crisis on the central European country's economy.
Separately, credit rating agency Fitch has downgraded its outlook for Hungary from stable to negative.Separately, credit rating agency Fitch has downgraded its outlook for Hungary from stable to negative.
Hungarian stocks have tumbled and the forint has fallen against the euro.Hungarian stocks have tumbled and the forint has fallen against the euro.
Earlier this week, Hungary sought help from the European Central Bank and it is in negotiations with the International Monetary Fund (IMF).Earlier this week, Hungary sought help from the European Central Bank and it is in negotiations with the International Monetary Fund (IMF).
Turbulence fearsTurbulence fears
Janos Veres, the country's finance minister, said the country's economy was likely to expand 1.2% next year, down from an earlier estimate of 3%Janos Veres, the country's finance minister, said the country's economy was likely to expand 1.2% next year, down from an earlier estimate of 3%
His comments came as Fitch attributed its downgrade of the country's creditworthiness to "shocks from global financial turbulence and the likelihood of recession in the euro area". The Hungarian currency weakened on the downgrade to 273 forint to the euro.His comments came as Fitch attributed its downgrade of the country's creditworthiness to "shocks from global financial turbulence and the likelihood of recession in the euro area". The Hungarian currency weakened on the downgrade to 273 forint to the euro.
In a bid to boost the markets, Hungary has been negotiating with the IMF to gain further help if need be, as a "last resort".In a bid to boost the markets, Hungary has been negotiating with the IMF to gain further help if need be, as a "last resort".
'No Iceland''No Iceland'
Hungarian bankers and analysts are keen to downplay the impact of the credit crunch on the economy.Hungarian bankers and analysts are keen to downplay the impact of the credit crunch on the economy.
The head of the country's banking association told Reuters the finance sector would slow but not collapse.The head of the country's banking association told Reuters the finance sector would slow but not collapse.
"Portfolio quality is deteriorating and will continue to deteriorate but banks are working with a fairly significant profit margin which provides a nice buffer," Peter Felcsuti, chairman of the Hungarian Banking Association, said in an interview to Reuters."Portfolio quality is deteriorating and will continue to deteriorate but banks are working with a fairly significant profit margin which provides a nice buffer," Peter Felcsuti, chairman of the Hungarian Banking Association, said in an interview to Reuters.
Mr Felcsuti rejected the idea that Hungary would see the same fate as Iceland, whose government seized control of all three of the nation's leading banks recently.Mr Felcsuti rejected the idea that Hungary would see the same fate as Iceland, whose government seized control of all three of the nation's leading banks recently.
"A comparison with Iceland is unjust and possibly even malicious. There are few if any similarities," said Mr Felcsuti."A comparison with Iceland is unjust and possibly even malicious. There are few if any similarities," said Mr Felcsuti.
Neil Shearing, an analyst with Capital Economics said: "The problems in Hungary are nowhere near as extreme as they are elsewhere in the region, next to Ukraine, the Baltics and the Balkans that have much bigger external deficits than Hungary."Neil Shearing, an analyst with Capital Economics said: "The problems in Hungary are nowhere near as extreme as they are elsewhere in the region, next to Ukraine, the Baltics and the Balkans that have much bigger external deficits than Hungary."
While analysts argue that Hungary is less exposed than other countries, they have also noted that investors are getting rid of Hungarian assets.While analysts argue that Hungary is less exposed than other countries, they have also noted that investors are getting rid of Hungarian assets.
Fears remain about how Hungary will ensure that it maintains investments from foreigners, which plays a crucial role in the economy.Fears remain about how Hungary will ensure that it maintains investments from foreigners, which plays a crucial role in the economy.