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Hungary’s economy growth to remain 3% in 2015 to 2.2% in 2016

Hungary’s economy growth to remain 3% in 2015 to 2.2% in 2016

BUDAPEST: Hungary’s GDP growth is expected to remain strong white slowing from 3% in 2015 to 2.2% in 2016 due to waning stimulus of consumption and investment, OECD said in a forecast published today. OECD, therefore, revised its earlier projection in November 2014, when it foresaw 2.1% GDP growth for 2015 and 1.7% growth for 2016. Hungarian government debt-to-GDP ratio could be 76.7% in 2015, decreasing to 76.1% in 2016. Government deficit is projected at 2.8% in both years.

Economic research institute GKI yesterday raised its projection for Hungary’s GDP growth this year from 2% to 2.5% based on strong first-quarter growth and an improved outlook. Data by OECD suggest that exports, rising 5.7% both this year and the next, will remain the most dynamic demand component, and the 4.8% current account surplus will widen further to 5.1%.

OECD expects unemployment to decline slightly from 6.9% to 6.2%, while private consumption growth slows from 2.4% this year to 2% next year. As the effects of cheaper energy wane, the OECD expects inflation to gradually converge with the 3% target, reaching 2.7% in 2016.