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EC raises Hungary GDP forecast

The European Commission raised its projection for Hungaryʼs GDP growth this year to 3.2% from 2.8% in a quarterly forecast published on Thursday, Hungarian news agency MTI reports.

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The ECʼs forecast is well under the governmentʼs projection for 4% GDP growth.

The EC left its projection for Hungaryʼs GDP growth next year unchanged at 2.8%.

Growth is set to slow from an estimated 4.9% in 2019 "as the domestic business cycle matures", the EC said. It projected deceleration in investment growth and easing labor market demand which could curb real wage and private consumption growth. The EC augured a "modest" rise in exports, in line with sluggish growth in Hungaryʼs main export markets.

The EC raised its forecasts for average annual inflation to 3.3% from 3.1% for 2020, and to 3.1% from 3% for 2021.

It attributed a recent uptick in headline inflation to increasing food and oil prices as well as the weaker forint.

"Inflation is set to peak in the first quarter of 2020 and decrease towards the end of the year as cost pressures fade," the EC said.

The EC publishes economic forecasts for member states four times a year, but the forecasts published in summer and winter only cover GDP and inflation.