A recently released report on emerging markets of Europe, London investors predict the prolonging tensions in Ukraine could hinder the previously positive growth outlook of Hungary. The report, put together by BofA Merrill Lynch Global Research, concludes that the 3% growth could fall back in the second half of the year.
The tensions surrounding Russian and Ukraine may extend its negative drag well into 2015, in total taking off 1 percentage point off the original 3% growth estimate. According to analysts, the fall may mostly come due to diminishing imports and a gloomier investment mood – both affected by the crisis.
The report has a positive conclusion as well, stating that the combined measures of the Hungarian government to ease the forex loan debt of households, eventually reducing the economic vulnerability of Hungary. Surprisingly, the BofA Merrill Lynch Global Research report claims the conversion of forex loans could have a positive outcome.
Last month, the full-year gross domestic production forecast of Hungary has been raised to 3.1%. Back then, Mihály Varga, Minister for National Economy, spoke about positive and negative risk, already referring to the Russian-Ukrainian conflict as he described the country’s economic outlook with caution.
via HungaryMatters, MTI photo Attila Balázs