Hungary's economic growth may accelerate from 2009

Hungary's economic growth may accelerate from 2009 after a slowdown because of measures to cut the budget deficit, according to the junior partner in the country's governing coalition. Growth “will not fall below 2.5% and may rise to over 4% from 2009,” Gábor Kuncze, chairman of the Free Democrats' Alliance, said today in a broadcast on the Web site of Budapest-based Nap TV. The government's “package slows down consumption and slows down growth.” The $104 billion economy grew at the slowest pace in more than a year in the Q2 as anticipated state spending cuts sent a chill through the housing market. Gross domestic product expanded at an annual rate of 3.6%, the statistical office in Budapest said yesterday. Prime Minister Ferenc Gyurcsány is raising taxes, regulating energy and drug prices and cutting spending to control the European Union's biggest budget deficit, compared to the size of the economy, as a proportion of GDP. His government has said fixing Hungary's budget problems is now more important than ensuring growth. The government expects growth of about 2% next year and 3% in 2008 compared with 4.1% in 2005 and 4.3% for this year, Gyurcsány said July 4. next year's growth is expected to be the slowest since 1.3% in 1996. (Bloomberg)