OECD joins consensus on Hungary’s “outstanding” economy, says ministry 

Budapest, June 3 (MTI) – The OECD has joined international organisations that acknowledge Hungary’s economic achievements and positive growth outlook, the economy ministry said on Wednesday.

Commenting an OECD forecast, the ministry said the government, the IMF, the OECD, large international institutions and market analysts share the view that Hungary’s economy is “performing outstandingly”.

The OECD has upgraded its forecast of Hungary’s main indicators to a greater extent than those of other Visegrad Group countries, it said.

Whereas global economic growth has slowed from last November, it is noteworthy that Hungary’s economy is on a stable growth path and stands out in European comparison, the ministry added.

The OECD upgraded its forecasts for Hungarian economic growth for this year to 3 percent from 2.1 percent, and to 2.2 percent from 1.7 percent for 2016

The Organisation for Economic Cooperation and Development said in its Economic Outlook released on Wednesday that exports were expected to grow by 5.7 percent both this year and in 2016 and the current account surplus of 4.8 percent this year was likely to rise to 5.1 percent.

Economy Minister Mihaly Varga welcomed the report, saying it was “substantially optimistic” about changes in Hungary’s economic structure, employment and domestic consumption, which would all raise growth.

Analysts polled by MTI said international players had welcomed the planned reduction in the banking tax, which the OECD report also featured.

David Nemeth, senior analyst at K+H Bank, said the fall in domestic consumption was due to lower expected government activity attributed partly to fewer European Union funds arriving to the country next year. Vivien Barczel, analyst at Erste Bank, agreed with the OECD report on inflation jumping to 2.7 percent in 2016.

Nemeth said inflation could grow to above 2 percent already this year, partly due to a rise in global crude oil prices and the effects of the government’s utility bill schemes fading off. Still domestic consumption will remain relatively high, at 2.4 percent this year and 2 percent next year with net real wages rising, he said. Meanwhile inflation is expected to rise also in the euro zone, which, through imported goods, will accelerate Hungary’s consumer price growth, too, he said.

The ruling Fidesz described the OECD forecast as another acknowledgement of Hungary’s achievements. Hungarians have every reason to be optimistic because there will be more jobs and next year’s budget guarantees lower taxes and a further increase in wages, the party group said in a statement.

Source: http://mtva.hu/hu/hungary-matters