The European Commission has revised its growth forecast for Hungary in 2015 from 2.8% to 2.9% in its semi-annual economic forecast. Brussels projects a 2.2% growth next year, which is set to grow further in 2017 and onward spurred by proceeds from EU funding. The EU's forecast are in line with that of the government's, the Ministry of National Economy reflected to the report.
Hungary will have a budget deficit of 2.3% this year, 2.1% in 2016 and 2.0% in 2017, according to the EC’s autumn forecast published on Thursday, The country’s public debt will amount to 75.8% of GDP this year, 74.5% in 2016 and 72.6% in 2017, according to the EC forecast.
Private consumption and external demand are both expected to drive growth, the EC said, noting the positive impact on household spending power of low inflation, high nominal wage growth, compensation from lenders, a planned cut in the rate of the personal income tax and strong labour market performance. The EC puts export growth at 7.7% in 2016 and 8% in 2017.Hungary’s unemployment rate is expected to fall close to 6% by 2017, although the EC noted that employment gains are due not only to private sector activity but an expansion of statesponsored
fostered work programmes. The EC said overall risks to the growth outlook were on the downside, adding that the arrival of asylum seekers does not fundamentally affect the country’s macroeconomic outlook.
The Commission’s macro-economic outlook is in line with the government’s predictions and data confirms the reforms are working, the Ministry of National Economy said in a statement.
