Kopint-Tárki projects GDP growth of 3.2% in 2015

Analysis

Kopint-Tárki Institute for Economic Research Co. expects Hungaryʼs economy to grow by 3.2% this year as a result of higher wages and increased employment raising household consumption by 3-3.5%; this projection is over the governmentʼs official 2.5% forecast, although National Economy Minister Mihály Varga recently said this yearʼs growth rate could reach 2.8-2.9%.

The institute puts next yearʼs GDP growth at 2.2%, while it predicts the National Bank of Hungary (MNB) to continue its recently relaunched easing cycle, which could lead to the base rate edging down to 1.50% from the current 1.95%. According to the institute’s predictions, industrial output will rise 6.5% this year and 5.0% next year, while the construction sector could expand by 2-3%. The unemployment rate is expected to fall from last year’s 7.7% to 7.2% in 2015 and 6.8% in 2016.

According to Kopint-Tárki CEO Éva Palócz the impact of restrictions on Sunday retail hours, especially on the catering industry, was a downside risk, and she added that Hungaryʼs recent brokerage scandals could also erode confidence and cause households to remain cautious.

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