Hungary’s economic policy goals and the room of manoeuvring for the economy after the elections

The Hungarian economy grew by 4.4 per cent in both the last quarter of 2017 and the first quarter of 2018. A growth rate faster than this was registered only once in the past decade. This is the fourth or fifth highest rate in the CEE region, and Hungary is likely to be at the peak of its current business cycle. The rate of increase in investments financed by EU transfers and in household consumption, boosted by the elections as well, is expected to slow down during the rest of the year. In addition, external demand is expected to deteriorate rather than grow further. However, based on the better than expected figures of the first quarter, GKI raised its GDP forecast for 2018 to 4 per cent from 3.8 per cent and its consumption forecast to 4.5 per cent from 4 per cent. GKI raised its inflation projection to 3 per cent due to the rise in world oil prices and lowered the expected general government deficit to 2.2 per cent of GDP as a result of a shift in the government’s economic policy.

You can download the forecast from here.

The archive of earlier forecasts is available here.

More information.

GKI’s economic sentiment index reached a new historic peak

GKI’s economic sentiment index reached another peak in June. According to the empirical survey conducted by GKI with the support of the EU, business expectations in June were close to their peak reached in February, and consumer ones remained hardly below their peak as well.

You can download the report from here.

You can download the survey data in Excel 2007 format from here.

You can reach the archive of survey summaries here.

 

Miklós Losoncz wins accuracy award

Senior researcher of GKI Miklós Losoncz won a Forecast Accuracy Award of London based institute Consensus Economics with his forecasts made on the Slovak economy for the year 2017.
The Forecast Accuracy Award program recognises the achievements of a select group of expert country economic forecasters who have most accurately predicted the final outturns of GDP growth and consumer price inflation in their targeted economies.

The results can be accessed using this link.

Consumption of households grows rapidly this year as well

As GDP, earnings and consumption grew faster than previously thought, GKI raised its 2018 GDP growth forecast from 3.8 per cent to 4 per cent. Although the foreign trade surplus is decreasing due to the rapid rise in domestic consumption, the external balance will continue to improve as a result of mounting EU transfers. Owing to the substantial advance payments from the general government necessary for accelerating EU transfers, the general government deficit in cash flow terms will be high and the decline in government debt will be modest. The EU is expecting an adjustment from the Hungarian government due to a high deficit compared to the favourable economic situation. Although the risk of escalating global trade war has declined, the Iranian, Turkish, and Italian situations have already had negative effects on energy prices and exchange rates.

You can download the forecast from here.

The archive of earlier forecasts is available here.

More information.

Improving industrial and construction expectations, deteriorating consumer, commercial and service expectations

The GKI economic sentiment index deteriorated marginally in May. According to the empirical survey conducted by GKI with the support of the EU, this was the result of the deterioration in consumer expectations as business expectations improved slightly. Nevertheless, the GKI economic sentiment index is only slightly below its historic peak reached in February.

You can download the report from here.

You can download the survey data in Excel 2007 format from here.

You can reach the archive of survey summaries here.