EBRD again ups Hungary GDP growth forecast
The European Bank for Reconstruction and Development (EBRD) raised its forecast for Hungary’s GDP growth this year to 1.7% in its Regional Economics Prospects report released today. The forecast was raised from 1.2% in a report published last October “in light of the very substantial policy support to growth,” the EBRD said, citing a central bank scheme to support lending to SMEs and rapid monetary easing.
The 2014 budget assumes GDP growth of 2.0%.
The EBRD said Hungary’s economy grew at a faster than expected clip of 1.8% year-on-year in Q3 of last year on improved net exports, public investment and farm sector output. It said another round of government mandated utilities price cuts should leave Hungarians with more disposable income, supporting consumption, but it added that “longer-term consequences for investment in the sector may well be negative.”
“Over the medium term, we expect that the adverse legal, investment and financial environment has materially depressed trend growth,” read the report in part.
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