TakarékBank elevates 2015 GDP forecast to 3.3%

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Takarékbank, the central bank of savings cooperatives in Hungary, projects 3.3% GDP growth in Hungary this year, Gergely Suppan, the bankʼs senior analyst said yesterday. 

The bank projected 3.2% GDP growth for 2015 in its March forecast. For next year, Takarékbank forecasts GDP growth of 2.5%, Suppan added. The bankʼs analysts also see inflation slightly higher, at 0.4% on average for 2015. However, he added, they do not expect this to influence the central bankʼs rate-cutting cycle.

Suppan said investments could continue to grow modestly in spite of the weaker first-quarter figures, but consumption could increasingly become the main engine of growth in the coming quarters. Employment is expected to sink to 7.2% on average this year, Suppan added. He said inflation could accelerate to close to the central bankʼs 3% inflation target by the end of 2016. Therefore, Takarékbank expects the national bank to end its rate-cutting cycle at 1.50% and not begin raising the base rate until the last quarter of 2016, he added.

Takarékbank’s analysts project a 2.2% general government deficit in 2015 and 2% in 2016. András Oszlay, department head at the bank, said the forint is expected to remain in the 305-315 range against the euro in the long term, ending the year 2015 at 300.

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