The International Monetary Fund (IMF) has raised its projection for economic growth in Hungary this year to 2.7% from 2.3% predicted last October. In its World Economic Outlook published Tuesday, the Fund said economic growth remained strong in Hungary but it is expected to decline this year on account of lower investment growth and less supportive fiscal conditions. Private consumption was the key growth driver amid improving labour market conditions, it added.
The IMF forecasts consumer prices will remain unchanged in 2015 and increase by 2.3% next year. Hungary, with output still below potential and persistent disinflationary pressures, has scope for further cautious monetary policy easing, the IMF said. Elevated public debt and high fiscal deficits, however, highlight the need for fiscal consolidation, including reining in spending, it added. For 2015, the IMF puts Hungary’s current-account surplus at 4.8% and unemployment rate at 7.6%.
In the previous World Economic Outlook, the 2015 c/a surplus was projected at 2% and the unemployment rate at 7.8%. For 2016, the IMF puts the current-account surplus at 4.1% and unemployment rate at 7.4%. Last week the Monetary Fund said in its country report that it appreciated Hungary’s recent economic achievements but called for further efforts to maintain growth, reduce vulnerabilities and improve business environment.
via hungarymatters.hu and imf.org photo: mon.hu