Kopint-Tárki puts Hungary’s GDP growth at 3.0% in 2011, just under the government’s projection of 3.1%, the economic research institute said in a fresh forecast published on Thursday.
Kopint-Tárki’s projection for GDP growth is unchanged from the previous ones announced in December and March. The research institute expects a pickup in investments and private consumption in the second half of the year to support growth.
Private consumption could grow by 1.5%, while public consumption stagnates, said CEO Éva Palos. Investments are set to rise 2.5% and gross capital formation is seen increasing 5%, over the 3% rate expected earlier, she said. Gross capital formation jumped 8.4% in the first quarter as inventories were restocked, but the pace cannot be repeated for the full year, thus growth will come mainly from investments, she added.
Kopint-Tárki raised its forecasts for export growth to 10% from 9% and for import growth to 9.7% from 8.1%.
Hungary’s industrial sector expanded 11.1% in January-April, but the rate of growth will probably slow to 8-9% on average for the rest of the year.
Depending on the weather, Hungary’s farm sector could grow by 10% again.
The construction sector is set to contract 8% under an optimistic scenario.
Kopint-Tárki expects households’ real incomes to rise 4-5% this year. Excluding family tax preferences introduced at the start of the year, real income would increase just 2% it noted.
The unemployment rate is expected to remain over 11% for some time.
Kopint-Tárki raised its projections for average annual inflation to 4.0% from 3.9% for 2011 and to 3.6% from 3.4% for 2012.
The research institute puts the general government deficit — excluding assets transferred from private pension funds — at 2.9% of GDP in 2011 and at 3.2% in 2012.
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