Lu Zhongyuan, vice president of the think tank Development Research Centre (DRC) of the Chinese government also believes that inflation will fall to 4.5% next year.

The economic slowdown expected – compared to a rate of over 9% expected this year – is estimated by the economist as "reasonable and acceptable" because, he says, the quality of growth improves.

While Budapest dismissed all claims with the International Monetary Fund since he took office in spring 2010, the decision of the head of the Conservative government to reconnect with the institution led by Christine Lagarde is a clear political defeat.

He assured that the government did not act in an emergency, Hungary continued to borrow in the markets and the agreement would not affect the financing of public debt.

"We are not dependent on the goodwill of others," he said.

The IMF representative in Budapest was not immediately available to comment on these statements.

The government is considering an increase in future tax on soft drinks that could go to his double, said Wednesday the government spokesman Valerie Pécresse after the Council of Ministers.

"It is envisaged that an increase could not be more than twice," said budget minister, adding that the tax, announced in late August as part of the anti-deficit plan would not be extended to sweetened beverages, fruit juices and mineral waters, as has been said Wednesday morning in the press.

Inflation reached 2.5% in August, is already well above the objective of the ECB, whose primary mission is to maintain price inflation slightly below 2%.

Economists polled by Reuters were expecting a figure of 2.5% in September as in August. However, they believe that inflation will fall soon because of the economic downturn.

"It's not a good figure, but I do not panic.That said, I think these figures imply that the ECB will not lower interest rates next week, "he tempered Martin Van Vliet, economist at ING, who said that inflation will decline in coming months because of lower oil prices and supply.

Markets anticipated more rate cuts key ECB, in support of the European economy and to offset the fiscal restraint measures introduced by most European countries.

The investment bank JPMorgan said last week anticipating a 50 basis point ECB rate to 1.0%.

According to a survey this week by Reuters, 56 of 76 economists surveyed felt that the rates will be unchanged at the monetary policy meeting in October, which will be the last of the ECB President Jean-Claude Trichet.

However they planned a rate cut in early 2012.

THAT WILL LOWER RATES?

After raising rates twice this year, the ECB changed its attitude at the September meeting and opened the door to future cuts.

According to many economists, it would be the next President of the ECB, Italian, Mario Draghi, Jean-Claude Trichet decides to lower the house money before taking office.

They argue that if Mario Draghi had to take such action in its first monetary policy meeting in November, it might then be portrayed as a supporter of lower rates.

This would imply, however, that Jean-Claude Trichet left as the last measure of his eight-year term rate cuts in a context of high inflation: such a decision contrary to fundamental principles of the ECB, would be enough to ruffle the supporters of the 'budgetary orthodoxy.

The euro area may therefore have to await further signs of a slowdown, or a decline in inflation, to get a breath of fresh air in the form of lower rates. However, such signals may soon appear.

"The slowdown has driven down commodity prices.Therefore, we should observe a slowing of inflation in energy prices, which was the main driver of core inflation in recent months, "warned Clemente De Lucia, an economist at BNP Paribas.

German MPs began at 9 am Thursday to discuss the expansion of the bailout funds in the euro area, where they must decide by late morning. The Bundestag (lower house) has to decide on expanding the envelope and skills of European relief fund created in 2010 (EFSF) to assist countries in the euro area in need.

The relevant law should be approved by a large majority. "One or the other friend has a different conception of things," conceded the first speaker, the leader of the Conservative caucus (CDU / CSU) Volker Kauder, referring to the reluctance of a number of members of the majority to engage in Germany even before the rescue of its partners."But we will show that this coalition is able to act: the future of Europe is in good hands with the government," he said.

The vote on Thursday will be "an important contribution to our country for the future of Europe," he promised. Tuesday after Slovenia and Finland Wednesday, Germany will be the eleventh country to approve the mechanism. Six other countries will be asked, including Estonia, which must also discuss the issue Thursday, and Slovakia, still reluctant. The implementation of the mechanism requires the approval of 17 members of the euro area. But the green light from Germany, Europe's largest economy and biggest contributor to the bailout fund with 200 billion euros of guarantees, should give a decisive impetus.

After the vote registered, the number of dissident liberals and conservatives will be scrutinized carefully as an indicator of the flexibility of Merkel to confirm the next steps of European rescue plan. The exact number should be known only in the afternoon. The Bundestag is to vote this fall on a second plan of aid to Greece and early 2012 on the permanent mechanism MES, to succeed the EFSF. European leaders hope to have finished the EFSF expanded by the end of October, even though the discussions are already raging over a new building that would, if necessary, assist Italy or Spain.

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During the past week, the Dow Jones gained 1.6%, the Standard & Poor's 500 2.2% and the Nasdaq Composite 2.5%.

U.S. equity markets are about to close, however, their worst quarter for a year while negotiations between Barack Obama and Republican chairman of the House of Representatives John Boehner to raise the debt ceiling of the United States and avoid default, not moving.

"It is likely that an agreement in whatever form it leads to a rebound in relief for the actions," says Glenn Starkman, head of equity sales at Dahlman Rose in New York.

"It would come after the results and some pretty good resolution of the Greek problem and it could allow a rebound for the market," he adds.

The dispute between Democrats and Republicans on the debt, however, may be prolonged. "Who knows where this will lead?" Asks Nick Kalivas, an analyst at MF Global in Chicago."We are vulnerable to a strike by the buyers if we do not get news."

In addition, preliminary results published by companies are not all satisfactory, especially the group of Rockwell Collins avionics and industrial Caterpillar.

Moreover, great names of consumption as Pepsi and Whirlpool, have warned against the weakness in developed markets, which has reduced their share price.

ASYMMETRY

Nick Kalivas announces that this week will follow with attention the accounts and forecasts for big names such as UPS in the mail, for Texas Instruments semiconductor and Amazon for online distribution.

About 30% of companies in the S & P 500 have so far published their results for the quarter April-June.They exceeded the consensus by 3.8% overall and only 7% of them have performed below expectations, according to data from Morgan Stanley.

The prices of companies that missed the consensus were punished the stock market.

"The market punishes failure more than it rewards good surprises, asymmetry, which we believe should continue," writes Adam Parker to its clients, specializing in equity at Morgan Stanley.

The coming week will be full of economic indicators as the market lacks vision on the prospects for growth.

The indicators are the future of the consumer confidence index published by the Conference Board and the University of Michigan, the beige book on the economics of the Federal Reserve and the first estimate of growth in the second quarter. Gross domestic product (GDP) is expected to increase by 1.9%.

Bob Doll, chief investment officer at BlackRock shares, notes that since 1960, when growth was at an annual rate below 2%, the U.S. economy fell into recession.

This increase in debt could undermine the government's objective to begin to reduce the debt ratios of France from 2013.

"This will have an indirect effect is an increase by 2014 our debt levels, given the inclusion of guarantees, up to about 15 billion euros," said François Fillon to Following a meeting with parliamentarians of the majority.

The government expects public debt will continue to grow this year and next year (85.4% and 86.9% end 2011 end 2012) and begin to decline in 2013 to reach 86.4% at end 2013 and 84.8 % end of 2014.

François Fillon announced that the new support plan for Greece would require a new supplementary budget to be presented to Parliament in September.

The leaders of the euro area reached an agreement Thursday involving the private sector and reforming drastically the stability fund to make an embryonic "European Monetary Fund."

Welcomed by the markets, the new Greek plan, a total of 109 billion euros, will be echoed by participating banks and European insurers, the amount could go up to 50 billion euros.

NO BANKRUPTCY OF STATE

"This agreement marks an absolutely decisive in the history of the euro area," said François Fillon."There will be no state of bankruptcy in the euro area, because the solidarity of the euro area will be complete.."

The "golden rule" would entrench the need to reduce deficits in the French Constitution is now more than ever, still says the head of government.

"It is indeed now a joint effort of the countries in the euro area to adopt this budget framework must be credible leads," he said.

France has pledged to reduce its public deficit below 3% of GDP in 2013 but believes it must include the balance of state finances in a basic document.

If this "golden rule" was passed by the majority, it must, to be enshrined in the Constitution, getting three-fifths of the vote in a Congress, which requires adherence to some of the parliamentary left.

The Socialist Party refuses for the moment and Nicolas Sarkozy has not officially taken the decision to convene the Congress but the majority, Francois Fillon at the head, pushed him to move forward.

For the Prime Minister, France played a "central role" in the conclusion of the agreement, including by reaching before the summit in Brussels an agreement with Germany.

"The Franco-German duo has once again played a key role in finding the right solutions to the crisis.I guess you could say that the Franco-German couple is the key to stability in the euro area, "he said.

The spot price of gold to the purchase was worth 1572.79 dollars per ounce at 24:04 GMT 1565.25 against Tuesday night in New York.

The Portuguese economy is expected to contract by 2% in 2011 and 1.8% next year, partly because of the austerity program that the country has committed to implement in exchange for international financial assistance, according to new forecasts from the Bank of Portugal (OTP). The OTP has revised its previous forecast, which projected a decline in GDP of 1.4% this year and an increase of 0.3% in 2012, published before the announcement of the austerity program negotiated over three years in May with European Union and the International Monetary Fund in exchange for a loan of 78 billion euros.

"The Portuguese economy in 2011-2012 will be marked by a recession in the context of macroeconomic imbalances," said the OTP in its summer economic bulletin, confirming a recession this year and joining the European Commission forecasts and the International Monetary Fund for that period. Portugal was the third EU country, fearing now a contagion of debt to other countries in the euro area, have called on outside help after Greece and Ireland last year.

The new Portuguese government right has repeatedly reaffirmed its commitment to rapidly consolidate the country's public finances with a program "more ambitious" than the EU-IMF plan, which calls for reducing the public deficit of 9.1% of GDP in 2010 to 3% in 2013.For the Portuguese Central Bank "strict application of the economic adjustment program and financial is essential to the return of confidence in the economy."

Over the period 2011-2012, exports are expected to decline compared to 2010 (8.8%), while remaining one of the "most dynamic elements of the economy" with a forecast of 7.7% for 2011 and 6.6% next year. As for inflation, the harmonized index of consumer prices is expected to grow 3.4% this year and 2.2% in 2012, according to the OTP.