Prospects for the next year are gloomy, and recession is looming, though less deep than two years ago. This is only in part a consequence of the worsening global economic environment.
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.
In the first half of 2012 the Hungarian economy got into recession. It further deepened in the second half of this year due to the drought. Consumption, investments and lending are all plummeting. The financial position of the majority of companies is deteriorating.
GKI forecasts that a recession can be expected in Hungary in 2012, a decline of about 1.5 per cent just like in the first quarter of the year. Though exports will increase in the second half of the year due to automotive investments, domestic demand is not expected to improve.