The MNB forecasts Hungaryʼs GDP growth will slow to 2.5% next year from a projected 3.0% in 2015, before accelerating to 3.0% in 2017.
Growth could be increasingly driven by a recovery of domestic demand, supported by higher consumption and private investment, according to the report. Household consumption is expected to continue to increase, helped by improving income developments and “the gradual easing of precautionary motives”, the report added.
The MNB forecasts household consumption expenditures will rise to 3.2% next year from a projected 3.0% in 2015, then slow to 2.6% in 2017.
Household investment activity could be boosted – against the backdrop of a low-yield environment – by a rise in real incomes as well as the government decision announced earlier in the week to lower the VAT rate on home construction, the MNB said. However, a drop in EU transfers, following the deadline at the end of this year for take-up of grants from the 2007-2013 funding cycle, is expected to cause a sharp decline in public investments, it added.
The MNB sees investments falling 2.0% next year, following a projected stagnation in 2015. But it forecasts a 3.6% increase for 2017.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
