Daily News Hungary economy

Budapest, April 6 (MTI) – Economic research institute Kopint-Tárki is standing by its forecast for GDP growth of 2.4 percent this year, a hair under the official government projection of 2.5pc.

Kopint-Tárki sees the growth rate accelerating to 2.9 percent next year, CEO Éva Palócz said, presenting forecasts previously updated in December.

The forecasts were prepared with the support of national business association VOSZ.

Inflows of European Union monies are expected to be slower at the start of the new funding cycle, which poses a risk for developments in investments, she said. Industry will continue to drive growth on the production side, while household purchases support the consumption side as employment and real wages grow, she added.

Hungary’s unemployment rate is set to fall to 6 percent this year and to 5.5 percent in 2017, according to Kopint-Tárki. Exports are seen continuing to rise at a faster clip than imports, though the difference between the two rates is expected to decline.

Kopint-Tárki lowered its forecast for annual average inflation this year to 0.2 percent from 1.6 percent projected in December. It forecast CPI for next year at 1.8 percent.

The budget deficit as a proportion of GDP is expected to reach 2 percent both this year and next, while the state debt ratio is likely to fall to 74.5 percent and 73.7 percent of GDP at the end of this year and the next, respectively.

Palócz acknowledged the potential impact of government measures to support home purchases, but said the effect on the construction sector would still not be felt this year.

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

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