BUDAPEST: Hungary’s economy is expected to grow by 3.2 percent this year, GKI, an economic research company, said on Wednesday. It revised its December of forecast 3 percent growth due to a higher-than-expected 8 percent projected growth in investments for 2017.
Hungary’s government targets economic growth of 4.1 percent this year and 4.3 percent next year. GKI forecast personal consumption growing by 5 percent this year, while exports are expected to rise by 6 percent and imports by 7.5 percent. Inflation is expected to be around 2.5 percent, while the current and the capital account is likely to show a combined surplus of 8 billion euros, or 6.7 percent of GDP. Average unemployment rate is projected to drop to 4.2 percent in 2017 from 5.1 percent in 2016, GKI said, adding that this year’s budget deficit is expected to be around 2.5 percent of GDP, based on European accounting. Analysts for Italian-owned CIB Bank project Hungary’s GDP will grow by 2.7 percent this year. Growth will be supported by a pickup in domestic demand, especially household consumption, and faster absorption of EU funding, according to the lender’s latest forecast, which is well below the economy ministry’s latest projection.
Industrial output is expected to grow by 4.2 percent, while the trade surplus is seen narrowing to 8.27 billion euros from 9.97 billion last year, CIB analyst Mariann Trippon said, adding that inflation was likely to average 2.7 percent. The unemployment rate is expected to remain flat at 4.5 percent and the budget deficit will be around 2.4 percent of GDP, she added.
