...like I said, massive incentives for governments to be "liberal" with official figures.
June 4 (Bloomberg) -- Hungary’s forint dropped to the weakest level in a year, stocks plunged the most worldwide and government bond yields had the biggest increase since November 2008 after a spokesman for Prime Minister Viktor Orban said the economy is in a “very grave situation.”
The forint depreciated 2.1 percent to 287.73 per euro at 2:28 p.m. in Budapest, the weakest level since June 2009. The extra yield investors demand to own Hungary’s debt over U.S. Treasuries rose 93 basis points, the most since November 2008, to 4.12 percentage points, according to JPMorgan Chase & Co.’s EMBI Global Index. The BUX Index of equities tumbled 7 percent.
Hungary’s economy is in a “very grave situation” because the previous government manipulated figures and lied about the state of the economy, Orban’s spokesman Peter Szijjarto said at a press conference in Budapest today. Talk of a default is “not an exaggeration,” Szijjarto said. European equities and U.S. stock-index futures fell after the comments.
“The headlines explain it all,” Koon Chow, an emerging- market strategist at Barclays Capital, said in a phone interview from London. “The situation in Hungary is not really that bad, but if you have someone from the government say something like that it only invites people to put on shorts.”