Due to better-than-expected Q4 data last year and relatively favourable economic expectations at the beginning of this year—despite the third wave of the pandemic and mixed data—GKI raised its growth forecast for 2021 by 0.6 percentage points to 4.3 per cent (4-4.5 per cent) compared to the end of last year. This brings Hungarian GDP close to, but not yet at, its 2019 level. The main negative risk of the projection is that the substantive restrictions caused by the pandemic will persist for a while in the second half of the year (either in Hungary or in its main trading partners). However, the approaching elections in 2022 may have a stimulating effect by encouraging the government to further loosen fiscal policy. According to GKI, employment and unemployment will remain broadly unchanged on an annual average but will improve over the course of the year. Real earnings will increase by 2 per cent, consumption by 3.5 per cent and investments by 6 per cent. Although the general government deficit is decreasing, it will be unreasonably high: after last year’s 8.1 per cent it could be around 6.5 per cent this year. Inflation is accelerating, it will be around 3.9 per cent after 3.3 per cent in 2020, and the forint will weaken further on an annual average, thus one euro will be worth at least HUF365 this year after HUF351 last year, and it cannot be ruled out that the National Bank of Hungary will be forced to tighten up. The external financing capacity will be in a stable surplus, due to the expected inflow of EU transfers. Although the international isolation of the Hungarian government is increasing, no change in policy is expected this year.