Hungary hopes to build its way out of financial crisis

Hungary hopes to build its way out of financial crisis Budapest  - Hungary's construction industry is to be given an 8-billion-dollar shot in the arm over the next year and a half in a bid to protect jobs and boost the country's flagging economy, the government announced on Wednesday.

Minister for National Development and Economy Gordon Bajnai told reporters that the money, over 1.8 trillion Hungarian forints, would be used to support 636 major projects over the next 18 months.

"This programme will partly counter-balance the effects of the financial crisis," Bajnai said following a meeting with construction industry leaders.

Among the government's plans are 267 new schools, 24 medical centres, 350 kilometres of new roads, 400 kilometres of railway, and 78 urban renovation projects, the minister said.

About 85 per cent of the money will come from the European Union, with Hungary's central budget and local authorities contributing the remainder, said Bajnai.

"The Hungarian government's most important short-term task is to retain as many jobs as possible," the economy ministry said in a statement.

Hungary has been in financial crisis since 2006, well before the credit crunch, when its budget deficit of 9.2 per cent of gross domestic product (GDP) was the highest in the EU.

The International Monetary Fund, EU and the World Bank stepped in last October with a 25-billion-dollar rescue loan as the country's economy and currency looked set to collapse.

The government has predicted that the Hungarian economy will shrink by up to 3 per cent this year. dpa

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