IMF foresees faster economic growth in Hungary

Real private consumption could grow 2.6%, faster than the previous forecast of 1.5%, which was published in October 2014.

IMF sees average inflation in 2015 to be around 0.0%, compared to 2.3% predicted earlier. Current account balance to GDP is set at 4.8%, higher than the 2.0% in the previous report. Total external debt to GDP will only reach 106.7% this year as compared to 108.4%, IMF added.

IMF expects the general government deficit in Hungary to be at 2.7% in 2015, somewhat lower than the 2.8% forecast earlier, while public debt would be 75.5% of GDP, lower than the 79.2% stated in the previous report.

For 2016 the IMF expects 2.3% GDP growth, a 2.0% increase in domestic demand, export growth of 5.5%, private consumption growth of 2.6%, 2.3% average inflation, a current account balance of 4.1%, a total external debt to GDP of 90.2%, a deficit of 2.5% and public debt at 74.7%.

The European Commission said in its spring economic forecast published on May 5 that Hungaryʼs real GDP grew by 3.6% in 2014, but that growth is expected to slow to 2.8% this year and to 2.2% in 2016, influenced by the shift in such growth-supporting factors as record EU fund absorption.

On May 4, the Hungarian government raised its projection for GDP growth this year from 2.5% to 3.1% in light of favorable data, which had recently been released – state secretary Péter Benő Banai said.

Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 609.8 bln at the end of April, the National Economy Ministry said in a preliminary report on Friday.