IMF: Hungary outlook ‘favourable’ but ‘subject to risks’
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Budapest (MTI) – The International Monetary Fund (IMF) said Hungary’s medium-term outlook “remains favourable but is subject to risks”.
Its economic growth is projected to be 3 percent this year, driven by a recovery in absorption of EU funding and strong consumption as wage increases boost disposable income, IMF staff said in a statement on Thursday after regular consultations in Budapest held between February 23 and March 8 with Economy Minister Mihaly Varga, central bank governor Gyorgy Matolcsy and representatives of the private sector and think-tanks.
Employment is projected to grow further and the economy may begin to operate at full capacity in the course of 2017, they added.
Weakening in the euro zone, a further slowdown in global trade and increased financing costs as monetary policy normalises are among the risks to Hungary’s outlook. Domestically, rising demand and an expanded home subsidy scheme could inflate asset prices, they added.
These risks would be mitigated by the improved current account and international investment position over the past years as well as by “the enhanced market sentiment towards Hungary”, the staff said.