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National Bank Envisions Raising Contribution Of Vehicle Industry To Hungary’s GDP Growth

Recently announced vehicle industry developments could raise Hungary’s GDP by about 0.04 percentage points this year and by more than 0.2-0.2 percentage points in the next two years as a first-round effect, the National Bank of Hungary (MNB) said in its recently published Inflation Report.

Audi Factory - Hungary Today (source: origo.hu)
Busy work in the Audi Factory in Győr, Western Hungary (photo: origo.hu)

The investment’s effect on growth was part of the reason while the MNB left its GDP projection unchanged, at 2.8% for this year and at 3% for 2017, despite projecting a far sharper drop of EU-funding-dependent state investments in 2016 and a cooler external climate, mainly due to Brexit and emerging markets, next year.

This year, the MNB also expects agriculture to give a 0.8-1 percentage-point boost to GDP. The MNB took into account four major car industry projects worth nearly 700 billion forints creating 3,600 new jobs when calculating the effect. Once completed, these projects would lift GDP through raising production and through second-round effects on suppliers such as rubber makers and services as well as through raising productivity, the MNB said.

Read more about Hungary’s recently announced vehicle industry developments for instance here, or here and here.

via hungarymatters.hu and mnb.hu; cover photo: Mercedes plant in Kecskemét, Central Hungary (motorauthority.com)