EBRD raises Hungary GDP growth forecast

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The European Bank for Reconstruction and Development (EBRD) raised its forecast for Hungaryʼs GDP growth this year to 3.8% on Wednesday. The forecast was raised from 3.4% in a previous release in November, reported state news wire MTI.

The new forecast still remains well under the governmentʼs projection for 4.3% growth in 2018. The EBRD puts Hungaryʼs economic growth in 2019 at 3.0%.

In a report on regional economic prospects, the EBRD noted investment growth in Hungary last year, at 16.8%, was the second-highest in the European Union. It attributed the increase to a revival of corporate lending as well as improved absorption of EU funding.   

The EBRD said private consumption remains Hungaryʼs "key growth driver," supported by "substantially increased" disposable incomes.

The EBRD counted the value chain effects of a potential slowdown in the eurozone and labor shortages among the risks to its growth forecasts.

In other EBRD-related news earlier Wednesday, Hungaryʼs Minister for National Economy Mihály Varga met with Jürgen Rigterink, the EBRD First Vice President and Head of Client Services Group, at the lenderʼs annual meeting in Jordan, the ministry said in a statement.

Hungary continues to count on the EBRDʼs active lending and investment activities in Hungary, foremost in the private sector, Varga said at the talks.

"We believe it is important for the EBRD to further boost its lending and investment activities in Hungary and the region, because there is a great need to accelerate the process of convergence," he added.

The EBRD is holding its 27th Annual Meeting and Business Forum at a venue in Jordan overlooking the Dead Sea on May 9-10.

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