IMF raises Hungary 2015 GDP growth forecast to 3 pc

Budapest (MTI) – The International Monetary Fund raised its projection for economic growth in Hungary this year to 3 percent, in its fresh World Economic Outlook published Tuesday, from 2.7 percent it forecast in April.

The projection is just below the government’s official forecast of 3.1 percent growth.

The IMF projects Hungary’s GDP growth rate will slow to 2.5 percent in 2016. The forecast was raised from 2.3 percent in April.

The IMF forecasts consumer prices will edge up 0.3 percent this year. In April it expected the consumer price index would be flat. Inflation is expected to rise to 2.3 percent next year, according to the IMF’s outlook, the same as the previous forecast.

Hungary’s current-account surplus is seen reaching 5 percent of GDP this year, up from 4.8 percent in the previous forecast. Next year, the surplus is expected to narrow to 4.3 percent of GDP, albeit not as far as the 4.1 percent the IMF projected in April.

The IMF projects Hungary’s unemployment rate will fall from 7.3 percent this year to 7 percent in 2016. In April, the IMF projected the unemployment rate would reach 7.6 percent this year and 7.4 percent next year.

Economy ministry state secretary for public finances Beno Peter Banai said the IMF’s projections were almost identical to the government’s. He told public news channel M1 that among the reasons for the IMF’s raised growth forecast were Hungary’s structural reforms, labour market measures and fiscal consolidation. Hungary’s achievements have been positive in international comparison, he said, adding that, regionally, only Poland and Hungary were highlighted by the IMF. The government projects higher growth in Hungary than the EU average. In the long term, however, the external environment could develop less favourably and this could have negative consequences, he added.

The precondition for sustainable and healthy growth in the Hungarian economy is the same around the world and in Europe, he said. The Hungarian economy is open and its growth depends heavily on external orders and export volumes, he added.

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