Economic research institute Kopint-Tárki has lowered its forecast for this year’s economic growth to 4 percent from 5 percent. In its latest forecast published on Thursday, Kopint-Tárki said domestic consumption would grow by 4.3 percent and gross capital accumulation by 4 percent.
Its inflation was forecast upped to 8.7 percent from its December projection of 5.5 percent, while it projected Hungary’s current-account deficit increasing to 5 percent of GDP.
Hungary’s trade balance showed a deficit of 91 million euros in February, the Central Statistical Office (KSH) said in a first reading of data on Thursday. Hungary, an export-driven economy where trade surpluses are the norm, has shown a deficit for the eighth month in a row. Exports rose by an annual 17.7 percent, to 11.403 billion euros and imports climbed 29.2 percent to 11.494 billion.
Trade with other European Union member states accounted for 76 percent of exports and 69 percent of imports.
Takarékbank chief analyst Gergely Suppán said higher industrial output paired with rising factory gate prices are boosting exports, calculated in euros, while strong domestic demand and dearer commodities and energy are lifting imports. The higher commodities and energy prices are hurting Hungary’s terms of trade, although the jump in grain prices is mitigating the effect “to a small degree”, he added.