Economic research institute GKI says that while the Hungarian economy has performed outstandingly well in the first half of 2019, GDP growth will slow down significantly in 2020, slipping below the rate of inflation predicted for next year.
The institute says that the 5.1% increase of the Hungarian economy in H1 2019 is the fastest in the EU this year, with the rate being about three times as high as the average of member states.
Still, GKI notes that while the Hungarian economyʼs performance in Q3 took a promising start, industry and construction slowed down significantly in August. Business expectations suggest little in theways of improvement in the upcoming months.
According to GKI, the rate of inflation has also decreased since May, by almost one percentage point until September. While the state of public finances remains favorable, the current account is in deficit once again this year, with the forint performing weakly.
The institute argues that a deterioration in global economic conditions and the weakening of the stimulating effects of EU transfers anticipate a marked slowdown of GDP growth in 2020; GKI predicts growth of 2.7% next year, with an inflation rate of 3.3%.