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IMF Raises 2019 GDP Growth Forecast for Hungary

MTI-Hungary Today 2019.10.15.

The International Monetary Fund (IMF) raised its projection for Hungary’s GDP growth this year to 4.6 percent in its fresh World Economic Outlook published on Tuesday.

The projection was raised from 3.6 percent in the previous forecast released in April.

The government’s official forecast for 2019 GDP growth is 4.0 percent based on the spring update of Hungary’s Convergence Programme, but Finance Minister Mihály Varga said after Q2 data released at the end of August showed higher than expected growth that the full-year figure could reach 4.3-4.4 percent.

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The IMF sees Hungary’s GDP growth slowing to 3.3 percent in 2020.

The IMF projects average annual inflation will pick up to 3.4 percent in both 2019 and 2020, climbing over the National Bank of Hungary’s 3.0 percent mid-term target. The projection is up from 3.2 percent forecast in April.

It sees the unemployment rate dropping further to 3.5 percent in 2019 and to 3.4 percent in 2020.

The current account deficit is set to widen to 0.9 percent of GDP in 2019 before narrowing to 0.6 percent in 2020.

The IMF noted that fiscal projections for Hungary include the IMF staff’s projections of the macroeconomic framework and of the impact of recent legislative measures, as well as fiscal policy plans announced in the 2018 budget.