ADVERTISEMENT

JP Morgan cuts GDP forecast for Hungary, CEE

Food

Hungary's economy, along with its Central and Eastern European peers, is facing a slowdown in the headwind of a struggling eurozone and the Ukraine-Russia crisis, London-based emerging markets economists said yesterday.

In a markedly revised update released to investors in London, JP Morgan said that downward revisions to its Euro area and emerging markets growth forecasts have prompted it to lower its GDP growth forecasts for Central Europe. It said it has shaved off 1 percentage point from its average GDP growth forecasts for the third quarter of this year for the CEE region, including Hungary, due in part to the "unexpected collapse" in the August industrial production data.

The firm also reduced its regional forecast for the first half of 2015 by 0.5 percentage points on average. JP Morgan now expects Hungary's economy to expand at a rate of 2.2% in 2015 against its previous forecast of 2.5%. "Idiosyncratic factors plus lower 2015 oil price assumptions have spurred the changes, mostly downward, in our EMEA EM 2015 growth forecasts (...) Although Central European countries are net energy importers and will benefit from lower oil prices, weaker growth in the Euro area and Russia will dampen demand for CEE exports".

The deceleration in Chinese growth will also contribute to weaker export growth, mainly indirectly. "The regional slowdown, in our view, has (also) been related to the direct and indirect negative spillovers from the Russia-Ukraine crisis, which we now expect to remain unresolved through 2015", JP Morgan's London-based economists said.

ADVERTISEMENT

Digitization, sustainability among characteristics of future... Analysis

Digitization, sustainability among characteristics of future...

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

Transformation Delineation - Microsoft country general manag... Podcasts

Transformation Delineation - Microsoft country general manag...

ITM, capital gov't agree on support for public transport City

ITM, capital gov't agree on support for public transport

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.