The center-right Fidesz party formed the new government after successfully securing a two-third majority in parliamentary elections in April 2010. The new government announced its commitment to the budget deficit target of 3.8% of GDP for this year. Thus, the government is expected to continue to work with the IMF to maintain efforts aimed at reducing debt levels and supporting the domestic economy.
Furthermore, we believe that valuations have become even more attractive as company fundamentals remain strong with an average Price-to-Earnings ratio of 9.7 times and a Price-to-Book value of 1.5 times.[5] As such, we remain positive about Hungary’s long-term prospects.
[1] Source for all statistics s in the paragraph: Factset, based on MSCI Hungary Index. [2] Source for all statisticss quoted in the paragraph: EIU, as of June 7, 2010. [3] Source: EIU, as of June 7, 2010. [4] Source: EIU, as of June 7, 2010. [5] Source: Factset, based on the MSCI Hungary Index, as of May 31, 2010.Copyright (c) Franklin Templeton Investments
