The outlook for Hungarian economic growth is fundamentally positive, however, the fact that the number of employed is not increasing gives reason for caution, ICEG analyst Gábor Pellényi told a press conference in Budapest on Monday.
If the government fails to take steps to correct Hungary’s fiscal balance, the general government deficit could reach 9% of GDP by year-end, or 7.8% of GDP including the effects of pension reform, ICEG director Pál Gáspár said. Even if steps are taken to improve fiscal balance, Hungary’s level of state debt as a percentage of GDP will probably increase further to 63%-63.5% of GDP.
ICEG expects the forint to continue to trade around 265 to the euro for the remainder of the year, after slipping from 250 to the euro in the first quarter.
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