MNB explains discrepancy between earlier GDP growth forecast, actual figure

MNB

The National Bank of Hungary has attributed a marked difference between its earlier projection for 2016 GDP growth and the actual figure to lower inflows of EU funding and a decline in fiscal demand, Hungarian wire service MTI reported.

The MNB put 2016 GDP growth at 2.8% in a forecast published late in December, well over the 2% figure in a second reading of data by the Central Statistics Office (KSH) released early in March.

In a candid evaluation of its forecasts for 2016 appended to a report published yesterday, the central bank estimated that lower fiscal demand had dragged its GDP forecast down by 0.6 percentage point, while pay outs of EU funding “were significantly lower than our former expectations” and weighed on the forecast with the equivalent of 0.4 pp. The negative factors outbalanced higher than expected consumption, which lifted the forecast by 0.4 pp.

The MNB noted that it had started to factor in expected statistical revisions into its forecasts at the end of last year. It expects an upward revision of last yearʼs GDP data to bring the final figure to 2.2%.

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