Századvég predicts 3.4% GDP growth in 2015

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Government friendly research institute Századvég expects Hungaryʼs economy to grow 3.4% this year, before GDP growth slows to 2.7% in 2016, the company said on Friday. Inflation is seen at 0.3% in 2015 because of lower oil prices and a reduction in utility fees.

Inflation is set to grow to 2.6% in 2016. Rising income will result in a 3.3% increase in consumption in 2015 and a 3% increase in 2016. Employment should rise according to Századvég, meaning that the unemployment ratio is predicted to fall to 6.9% this year then to 6% next year.

Investment growth is seen as moderating, and the institute said a 1.2% rise in 2015 could be followed by a 1.6% fall in 2016 because of base effects. General government deficit is projected to be 2.3% of GDP this year, shrinking to 1.8% next year. In a report published in December 2014 Századvég forecast 2.6% economic growth, 1.6% inflation and a 2.3% government deficit for 2015.

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