In April, GKI’s economic sentiment index remained slightly lower than its historic peak in February. According to the empirical survey conducted by GKI with the support of the EU, expectations deteriorated in the business sector within the statistical margin of error, whereas they continued to rise among consumers.
After its historic peak in February, the GKI’s economic sentiment index fell slightly in March. According to the empirical survey conducted by GKI with the support of the EU, expectations deteriorated slightly in the business sector, whereas they continued to rise among consumers.
Although Hungary’s GDP expanded slightly faster than expected in 2017, by 4 per cent and considerably faster than the EU average, its growth rate was moderate in the CEE region. GKI do not change its GDP forecast of 3.8 per cent and investments forecast of 9 per cent for 2018. However, it raises the projected increase in consumption from 3.5 per cent to 4 per cent. Although last year’s soar of construction slows down in 2018 due to the high statistical base, this sector continues to grow fastest. Similarly to last year, industry will grow by 5 per cent in 2018. The decline in agriculture in 2017 is expected to be followed by some increase this year. Public administration will stagnate, whereas some acceleration can be expected in the financial sector. Compared to its previous projections, GKI cut its inflation rate forecast from 3 per cent to 2.7 per cent, and its unemployment forecast from 4 per cent to 3.7 per cent.
In 2017 the Hungarian economy expanded faster than expected, by 4 per cent. Although this rate is much higher than the EU average of 2.6 per cent, it is only moderate in the CEE region. The GDP growth rate may be close to 4 per cent in 2018 as well. The 17 per cent increase in investments in 2017 will slow down to about half of it this year, whereas the rise of consumption over 4 per cent will essentially remain unchanged. Although developments in the general government 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 per cent of GDP) is planned in Hungary in 2018, without sufficient reserves for the future.
After nearly one and a half years of almost continuous growth, GKI’s economic sentiment index rose to a new historic peak in February. According to the empirical survey conducted by GKI with the support of the EU, business expectations have never been more favourable than now, and consumer expectations were more favourable only once, during the few months of the Medgyessy government’s 100-day programme in 2002.