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CIB bank forecasts GDP growth to slow from 4.8% in 2019

Analysts for Italian-owned CIB Bank project Hungaryʼs GDP will grow by around 4.8% this year before growth slows to 3-3.5% in 2020, the bank told state news wire MTI in a statement.

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In May CIB bank forecast 3.5% GDP growth for 2019.

CIB chief analyst Mariann Trippon said that although growth is decelerating it would only be slightly below the average of the previous five years, meaning it would present no extra risks to the budget or labour market trends.

Consumption and investments, supported by EU funds, will continue to drive economic growth, but their positive effects will weaken in 2020 while export growth is expected to slow because of a deteriorating external environment, she explained.

Average inflation as well as tax-adjusted core inflation, specifically watched by the National Bank of Hungary, could be above the central bankʼs 3% target both this year and next year, signaling growing demand-side inflationary pressure. The base rate could remain at 0.9% until the end of 2020.

The governmentʼs official forecast for 2019 GDP growth is 4% based on the spring update of Hungaryʼs Convergence Program, but Finance Minister Mihály Varga said after Q2 data showed higher than expected growth, that the full-year figure could reach 4.3-4.4%.