Convergence Program forecasts steady 4% growth

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(Photo: kormany.hu/Géza Dede)

Hungaryʼs GDP growth is set to stay around 4% in the coming years, according to the countryʼs latest Convergence Program posted on the website of the European Commission, as reported by national news agency MTI.

The program puts GDP growth at 4.1% in 2019, 4.0% in 2020, 4.2% in 2021, and 4.1% in 2022. The projections for 2019-2021 are between 0.3 and 0.6 of a percentage point above those featured in the previous yearʼs convergence program.

Household expenditures on consumption are seen climbing 4.8% in 2019, 4.7% in 2020, 4.6% in 2021, and 4.5% in 2022, the program shows.

Gross fixed capital formation is set to grow by 7.5% in 2019, 3.8% in 2020, 5.7% in 2021, and 5.1% in 2022. The program projects inflation will edge up gradually and level out at the National Bank of Hungaryʼs mid-term 3.0% target in 2021.

Hungaryʼs general government deficit, as a percentage of GDP, is seen narrowing to 1.8% in 2019, 1.5% in 2020, 1.2% in 2021, and just 0.5% in 2022.

State debt, as a percentage of GDP, is set to decline to 69.6% in 2019, 66.7% in 2020, 63.4% in 2021, and 59.7% in 2022. The projections for 2019-2021 are 2.2-2.7 percentage points higher than in the previous yearʼs convergence program, which the report attributes, to a "significant degree," to the inclusion of Magyar Eximbank in the general government.

Presenting the program, Minister for National Economy Mihály Varga - who will assume the title of Finance Minister under the new government now forming - told MTI that the most important task of the governmentʼs economic policy in the coming four years would be boosting the rate of growth. Further improving competitiveness and productivity is of key importance, and this requires support for innovation and infrastructure investments that result in products and services with increased value added, he noted.

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