Hungary’s GDP growth has been low in 2016 compared to other countries in the CEE region or to its growth rate in the previous year. However, some acceleration of the growth rate can be expected in the second half of the year. GKI maintains its GDP growth forecast of 2 per cent for 2016. Internal and external equilibria are very favourable, and inflation almost ceased.
After reaching its lowest point this year in August, GKI economic sentiment index rose within the statistical margin of error in September. According to the empirical survey conducted by GKI with the support of the EU, expectations improved marginally in the business sector, whereas they remained unchanged among consumers. Although the GKI economic sentiment index has been fluctuating for two years at relatively high levels, its current September level is quite low.
Hungary’s GDP growth has been low in 2016 compared to other countries in the CEE region or to its growth rate in the previous year. However, some acceleration of the rate can be expected in the second half of the year. Internal and external equilibria are very favourable, and inflation almost ceased. However, in the second half of 2016 the general government deficit might be slightly higher (partly in connection with the boosting of the economy) and the external surplus might be lower (due to declining improvement in the terms of trade) than in the first half of the year. In the meantime, price increases may start slowly.
After its significant rise in July, the GKI economic sentiment index decreased significantly, thereby returning to its lowest point this year. Expectations in each of the four business sectors examined deteriorated more or less. Following its significant rise in July, the GKI consumer confidence index fell somewhat in August (by 2.5 points), close to its June level.
In July 2016, the Budapest and the Hungarian real estate market indices of GKI-MGYOSZ – compared to the previous quarter – increased by 1 and 2 points respectively. Both indices were 6 points higher than one year earlier. The index figures represent a 42-quarter peak for Budapest, and a 48-quarter peak for Hungary. That is, such high values have not been seen for ten or twelve years, respectively.