EBRD revises Hungary GDP growth forecast upward

MNB

In step with analysts at JP Morgan, the European Bank for Reconstruction and Development (EBRD) raised its forecast for GDP growth in Hungary next year to 1.2% in a report published today, up from 0.9% in a projection released in May.

The European Bank for Reconstruction and Development 

The government’s target for GDP growth next year is 2.0%.

The EBRD puts GDP growth in 2013 at 0.5%. In May, it forecast a 0.8% contraction.

The EBRD noted Hungary’s GDP grew for the second quarter in Q2 2013, but attributed the improvement mainly to public infrastructure spending.

In the medium term, contracting lending as well as growing uncertainty for investors in utilities and other sectors will continue to undermine Hungary’s trend growth rate, the EBRD said.

The EBRD acknowledged the National Bank of Hungary’s zero-interest lending scheme for SMEs (a.k.a. “Funding For Growth”) but said it was “unlikely to be effective unless more investor-friendly policies support loan demand.”

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