BUDAPEST: Hungary’s government projects GDP growth will remain over 3 percent in 2018-2020, an update of the country’s Convergence Programme sent to Brussels on shows here the other day.
The updated programme, which Hungary must submit to the European Commission each spring, projects GDP growth of 3.4 percent for 2018, 3.1 percent for 2019 and 3.2 percent for 2020. The programme noted that Hungary’s structural deficit, which excludes cyclical and one-off effects, had been well under its 1.7 percent-of-GDP Medium-Term Objective (MTO) since 2012, but it would rise temporarily over the MTO in 2016 and 2017, before returning to the target in the mid-term and falling under the objective in 2020.
Public debt as a percentage of GDP is set to fall to 73.6 percent in 2017, 72.4 percent in 2018, 68.4 percent in 2019 and 64.6 percent in 2020. The updated programme puts the unemployment rate among Hungarians aged 15-74 at 5.1 percent in 2018-2020, down from 5.2 percent in 2017. Investment growth is seen accelerating to 9.6 percent in 2018 from 9.1 percent in 2017, before slowing to 5.5 percent in 2019 and 4.0 percent in 2020.
Expenditures on household consumption are set to climb by 3.7 percent in 2017, then slow to 2.8 percent in 2018 and 2.7 percent in both 2019 and 2020. Export growth is seen picking up from 6.3 percent in 2017 to 6.8 percent in 2018, 7.0 percent in 2019 and 7.3 percent in 2020. Import growth is expected to accelerate to 7.6 percent in 2018 from 7.4 percent in 2017, before slowing to 7.0 percent and 7.1 percent in 2019 and 2020, respectively.
The projections in the programme show consumer price inflation rising from 0.9 percent in 2017 to 2.4 percent in 2018, then levelling out at 3.0 percent, the National Bank of Hungary’s mid-term “price stability” target, in 2019-2020. The government projects this year’s budget deficit will reach 1.9 percent of GDP, coming in under the 2.0 percent target in the budget act. The deficit is set to narrow from a targeted 2.4 percent in 2017 to 1.8 percent in 2018, 1.5 percent in 2019 and 1.2 percent in 2020.
