Századvég cuts Hungary growth forecast

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Economic research company Századvég Gazdaságkutató on Thursday said it cut its projection for GDP growth this year to 1.6% from 2.8% in a forecast in June.

Századvég lowered its projection for GDP growth in 2012 to 1.1% from 2.7% in the previous forecast.

The company expects household consumption to edge up 0.8% in 2011.

It puts average annual inflation at 3.8% in 2011 and 3.5% in 2012.

Századvég projects a general government surplus of 1.1% of GDP in 2011, although it notes that general government would run a 7.9% deficit without the transfer of private pension fund assets to the state. The government will be forced to undertake serious adjustments if it is to meet the 2.5% deficit target in 2012, Századvég said.

Századvég raised its projections for Hungary's current account balance to 2.4% of GDP in 2011 and 2.8% in 2012. It sees the trade surplus reaching €7.4bn in 2011 and €9bn in 2012.

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