Forecast for 2017

The Hungarian economy grew by 4.2 per cent in the first quarter of 2017, by a rate not foreseen by anybody. A growth rate higher than this one has been recorded only once since 2007. This high rate was due in part to the low base. The Hungarian growth rate was much higher than the EU average; however, it was not outstanding in the CEE region. The growth rate in Romania and Slovenia was more than 1 percentage point higher than in Hungary, and the economic growth of Poland and the three Baltic countries was also more dynamic. Data indicate a deterioration in Hungary in April, and the fall in the performance of agriculture will be significant in 2017. The growth rate of consumption is expected to accelerate in 2017, whereas a sharp slowdown in investments can be anticipated. Therefore, GKI raised its growth forecast for 2017 from 3.2 per cent to only 3.5 per cent, although it is possible that the rate will be slightly higher. Although external and internal equilibria will deteriorate slightly, and inflation will accelerate, these trends are acceptable in the short term. It is important for the medium-term course of the Hungarian economy that after the German elections the deepening of the integration of countries willing to work in close cooperation will be on the agenda in the EU. This can push Hungary to the periphery of the EU. At the same time, Hungary will less likely be able to rely on EU transfers of crucial importance.

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