BUDAPEST: In 2017 the Hungarian economy expanded faster than expected, by 4%. Although this rate is much higher than the EU average of 2.6 %, it is only moderate in the CEE region. The GDP growth rate may be close to 4% in 2018 as well, GKI says.
Although developments in the general government budget differed significantly from those envisaged in the budget in 2017, there was no review of the 2018 budget. As a result, probably the third highest deficit in the EU (2.4 % of GDP) is planned in Hungary in 2018, without sufficient reserves for the future.
The expansion of EU transfers to the Hungarian economy and the purchasing power of households will slow down markedly in 2018, but their rate of increase remains fast. As a result of this, the growth rate of investments will be roughly halved. This will primarily affect public investments that increased by nearly 60% in 2017.
The growth rate of the business sector will not reach its 2017 figure of 14% either. The growth rate of gross earnings will also slow down significantly, from 13% in 2017 to 7% in 2018.
