After its 2 per cent increase in 2016, Hungarian GDP is expected to grow by around 3 per cent in 2017. The significant decline in investments in 2016 will be followed by a noticeable growth in 2017 mainly due to the restart of the inflow of EU transfers, while the increase of consumption, which was very rapid last year, will continue similarly. However, the growth rate of imports will only be 2 percentage points faster than that of exports, and the terms of trade will stagnate at best. Inflation is going to pick up. Although economic indicators are expected to be favourable for 2017, there are no signs of any preparation for the post-2020 period following the phasing out of EU transfers.
According to the forecast of GKI Economic Research Co., the slowdown of the Hungarian economy that started in the second quarter of 2015 will continue. The 3.6 per cent growth rate in first-quarter was followed by only 2.7 per cent in the second quarter and summer data suggest a further deceleration. After 3.6 per cent in 2014, the GDP growth rate will be 2.7 per cent in 2015 and around 2 per cent next year, mainly due to the stagnation of investments in 2015 and their decline in 2016. However, internal and external equilibria will be favourable. Read More …
According to the forecast of GKI prospects for the next year are gloomy, and recession is looming, though less deep than two years ago. Inflation is accelerating, the general government deficit is larger than planned, however, it probably will be less than 3 per cent.
GKI forecasts that even to start the negotiations with the IMF successfully, genuine economic policy change and the return to market economy principles are required. Next year, however, this would only be enough to mitigate the decline. Regaining the confidence of financial capital and FDI markets can be expected only by 2013, at best.