BUDAPEST: An expected 3 percent drop in investments will push down Hungary’s economic growth rate to 2.3 percent this year from 2.9 percent in 2015, economic research institute Penzügykutató said in their latest forecast published on Wednesday.
Takarékbank analysts see this year’s growth higher at 2.5 percent while they said it could reach 3.1 percent in 2017. Penzügykutató added, however, that lower deficit and public debt figures, Hungary’s reduced vulnerability after forex loans were converted to forints, as well as a positive external position will help Hungary’s chances of upgrades by international rating agencies.
Penzügykutató expects the central bank to cut the base rate further, to 1 percent, in a favourable international environment and a forint-euro rate stronger than 310 over the longer term. As for inflation, Penzügykutató envisages a 0,6 percent figure on an annual basis in 2016, reaching 1.3 percent during the year.
Takarekbank puts this year’s inflation at 1.1 percent and at 2.6 percent in 2017. Penzügykutató sees Hungary’s ESA 2010 public finance deficit at 2.1 percent, slightly above the 2.0 percent target. Hungary’s public debt could be further reduced, to 74.4 percent of GDP, they added. Hungary’s exports could grow by 6 percent and imports by 4.5 percent this year, yielding an “unprecedented” surplus of 10 billion euros, Penzügykutató said.
