KFI: Hungary’s GDP growth could drop to 2.2%

Analysis

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According to estimates of the Fiscal Responsibility Institute (KFI), a non-profit think thank, Hungary’s GDP growth could drop to 2.2% this year, from last year’s 2.9%, and continue to fall below 2% in 2017, Balázs Romhányi, KFI chief executive, said according to online daily origo.hu.

Speaking at a background meeting, Romhányi said that the instituteʼs estimates already include the effects of the home building subsidy CSOK, the drop in VAT on new homes and the accelerated calling down of EU funds.

Romhányi said he believes that moderating oil and raw material prices continue to overwrite inflation expectations. According to Romhányi, inflation on imported goods, in addition to the falling prices of the raw materials offset domestic inflationary pressures. KFI expects inflation to gradually rise and stabilize to a figure close to the target of the National Bank of Hungary.

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