BUDAPEST, July 1 (Reuters) - Hungary plans to issue a eurobond by the end of September, as it gradually returns to market financing, capitalising on growing investor confidence in the government's policies, Finance Minister Peter Oszko told Reuters on Wednesday.
Oszko noted that painful budget measures affecting Hungarians had been passed by parliament. But he said more savings were needed in state administration to reduce the budget deficit to 3.8 percent of gross domestic product (GDP) next year from 3.9 percent in 2009.
On Monday parliament approved 2010 tax changes which were seen as a key test for the minority government and a backbone of Hungary's financing deal with the International Monetary Fund (IMF) secured last year.
"The first task was to prove to ourselves and the world that this job could be done; this period ended with Monday," Oszko said in an interview.
Hungary has mandated several banks to arrange meetings with fixed income investors for a non-deal road show which Oszko said will be held next week.
"We want to test in the upcoming period ... how much market financing can be used. It's important that from the IMF there is an offer and possibility for further financing if necessary, but first we must work to see how we can attract financing from the market and how much this financing can be," Oszko said.
When asked if Hungary could issue a eurobond by the end of the third quarter Oszko said: "By the end of the third quarter, this is part of our plans."
He declined to comment on the possible size of the offering.
(Reporting by Krisztina Than and Marton Dunai; editing by David Stamp)