Research institute lowers GDP growth projections for 2016, 2017

Budapest, July 12 (MTI) – Research institute Kopint-Tárki on Tuesday said it lowered its GDP growth projections for Hungary for this year and next to 2.2 percent and 2.7 percent, respectively, because of the slower-than-expected recovery and downside risk posed by the UK’s decision to leave the EU.

Earlier, Kopint-Tárki had projected GDP growth of 2.4 percent for 2016 and 2.9 percent for 2017.

Hungary’s government targets GDP growth of 2.5 percent this year and 3.1 percent next year.

Kopint-Tárki CEO Eva Palocz noted that Hungary’s first-quarter GDP growth had decelerated to 0.9 percent, putting it behind its peers in the region and also among the slowest growers in the EU.

Kopint-Tárki said investment volume would fall by 4 percent this year, double the decline it forecast earlier, but would grow by 2 percent in 2017.

It sees the unemployment rate falling from 5.6 percent this year to 5.1 percent in 2017.

Gross wage growth is set to climb by 5.5 percent both this year and next.

Consumption expenditures could rise by close to 5 percent this year, with private consumption climbing more than 4 percent.

Average annual inflation is seen rising from 0.3-0.4 percent this year to 1.6-1.8 percent in 2017.

The government’s deficit targets for both 2016 and 2017 are achievable, the institute said.

Kopint-Tárki made the forecast with support from national business association VOSZ.

Source: MTI