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György Matolcsy - Hungary Today (source: Lajos Soós - MTI)

Here’s Why Central Bank Chief May Be Right To Be Optimistic About Hungary’s Economic Outlook

In a Parliamentary committee hearing, Hungarian National Bank (MNB) President György Matolcsy (pictured above) said that Hungary’s economic growth would speed up and reach 3.5 to 4 per cent in 2017. While an opposition commentator finds Matolcsy’s forecast unrealistically optimistic, a leading online business site thinks that Matolcsy’s estimate may be correct. Hungarian press review by budapost.eu:

In left-wing daily Népszava, columnist Miklós Bonta thinks that the Hungarian economy will grow by around 2 per cent this coming year. Hungarian growth is sluggish, and there is no reason to assume that it will speed up any time soon, as a serious shortage of labour severely limits the expansion of industrial output, Bonta argues. In an aside, he notes that without EU-subsidies amounting to 3.5 per cent of the GDP, the Hungary would be in recession. In conclusion, Bonta thinks that Matolcsy’s estimate is nothing more than window-dressing.

Portfolio.hu, the leading online economic site, however, contends that György Matolcsy’s estimates are not at all groundless. According to Portfolio’s calculation, construction, industrial output, foreign investment and domestic consumption are likely to increase in 2017. In addition, higher public spending and infrastructural development will also boost growth. All this could make the fast economic growth predicted by Matolcsy possible even until 2020, Portfolio suggests. The authors acknowledge, nonetheless, that all this will depend on external as well as internal contingencies. Faster economic growth is possible only if agricultural output remains high and no global economic recession appears on the horizon.

Meanwhile economic researcher Kopint-Tárki revised its projection for economic growth next year to 3.2% from 2.7%, in its latest quarterly forecast, news agency MTI reported. The projection is slightly above the Hungarian government’s official projection of 3.1%. Kopint-Tárki projects 2.2% economic growth for this year, below the 2.5% official target. Inflation is expected to average 0.4% this year and 2.0% next year, the thinktank said.

via budapost.eu, nepszava.hu, portfolio.hu and hungarymatters.hu photo: Lajos Soós – MTI