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Economic Research Companies Raise 2019 GDP Growth Forecasts

MTI-Hungary Today 2019.09.26.

Economic research companies raised their projection for Hungary’s GDP growth this year to almost 5 percent.

Left-leaning Pénzügykutató‘s projection was raised to 4.7 percent in a forecast released on Wednesday, from 3.7 percent in a forecast published in March.

Research consultant Éva Várhegyi said economic growth could slow to 3.8 percent in 2020 as investments and consumption are expected to grow at a slower pace than this year.

Negative global economic effects will be counterbalanced by development funding from the European Union and measures by the government and the central bank to boost growth, she added.

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Pénzügykutató sees inflation reaching 3.4 percent in 2019 then falling to 3.2 percent in 2020. Unemployment could edge down a little to around 3 percent while real earnings could grow by 7 percent this year and by 6 percent next year.

The budget deficit may amount to 1.7 percent of GDP this year and fall to 0.9 percent in 2020 according to ESA methodology.

Government debt-to-GDP ratio should fall to 67.8 percent by the end of the year and drop to 64.5 percent by the end of 2020.

Pro-Fidesz economic research company Századvég raised its projection for this year’s GDP growth to 4.8 percent in a forecast released on Monday from 4.3 percent in a projection published in June.

Hungary’s GDP Growth Tops Europe: The Keys to Its Success

Századvég raised its forecast for the rise in household consumption expenditures to 4.7 percent from 4.5 percent. It modified its forecast for investment growth to 15.8 percent from 13.7 percent.

First-half investment volume was up 19.3 percent year-on-year, the latest data from KSH show.

The official government forecasts for GDP growth are 4.0 percent for 2019 (but Finance Minister Mihály Varga said after a release of Q2 data showed higher than expected growth that the full-year figure could reach 4.3-4.4 percent), 4.0 percent for 2020 and 4.1 percent in 2021 based on the April update of the government’s Convergence Programme.

2018 GDP Growth Underestimated by All

Hungary’s GDP was up 5.1 percent year-on-year in the first half.