The OECD raised its projection for Hungary’s GDP growth next year to 2.4% in a forecast published on Monday from 2.2% in the previous outlook released in June. The OECD stood by its 3.0% projection for Hungary’s growth this year. It forecast — for the first time — GDP growth of 3.1% for 2017.
The OECD sees private consumption growth picking up from 3.0% in 2015 to 3.2% in both of the following two years. It sees investments falling by 3.2% next year, as the result of lower disbursement of European Union funding at the start of the new funding cycle, before recovering to 0.8% growth in 2017.
The OECD projects Hungary’s budget deficit will narrow from 2.3% of GDP in 2015 to 1.9% next year and 1.5% in 2017, all well under the 3% Maastricht threshold. Hungary’s public debt-to-GDP ratio is set to fall to 74.6% in 2016 and 72.0% in 2017. The OECD noted that monetary policy remains “very accommodative” to the debt trend with the central bank policy rate at a record low.
Zoltan Cséfalvay, Hungary’s permanent representative in the OECD, said that the OECD “still has more faith” in Hungary’s economy than the European Commission. Earlier this month, the EC projected an economic growth rate of 2.9% for 2015, 2.2% for next year, and 2.5% for 2017.
via hungarymatters.hu and MTI photo: photo: Victor Tonelli – OECD – flickr.com