Fiscal Council head expects GDP growth to surpass 4%

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Economic growth in Hungary could be above 4% of GDP both this year and next year, the head of the Fiscal Council said yesterday at a conference, Hungarian news agency MTI reported.

Árpád Kovács said GDP growth will be above the EU average, the state debt to GDP ratio could continue to fall and the general government deficit should be under 3% of GDP in both years.

Kovács said economic trends in 2017 and 2018 are expected to be better than in 2016 because EU funding is boosting growth.

Corporate investing is set to grow, fuelled by EU development funding, increasing consumer demand, and inflation of around 2-3%.

Downside risks involve challenges on the labor market, unfavorable demographic trends and falling behind in competitiveness compared to the other Visegrad Group countries: Czech Republic, Poland, and Slovakia.

Kovács noted that some counties in the east and north of Hungary have lost 10% of their population in recent years as workers emigrated abroad, although the HUF 1 trillion of remittances in past years did lift domestic demand.

The Ministry for National Economy projects GDP growth of 4.1% this year and 4.3% next year.

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