GKI lowers growth forecasts for 2011, 2012
GKI has lowered its GDP growth projections for Hungary in 2011 and 2012 to 1.5%-2% because of the deteriorating global economic environment, the strong Swiss franc and domestic economic policy, the economic research company said in a fresh analysis.
GKI forecast 2.5% growth for 2011 in a projection published on July 4.
Weak domestic demand will make fiscal targets difficult to achieve, GKI said. At the same time this will improve Hungary's external balance and rein in inflation, it added.
GKI put the country's current and capital account surplus at around 4% of GDP this year. It projects average annual inflation of under 4%, down from 4.2% in the forecast published in July.
In spite of the lower inflation, National Bank of Hungary rate-setters are unlikely to start a loosening cycle because of uncertainty on global markets, GKI said.
GKI put industrial output growth at 5% this year, down from the 9% projection in July.
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