Takarékbank raises 2021 GDP growth forecast to 8%

Analysis

Takarékbank has raised its forecast for this year's GDP growth to 8% from 7.7% on a faster-than-expected pickup in the second quarter, the lender said on Tuesday.

Finance Minister Mihály Varga said late in September that GDP growth could reach 7-7.5% this year.

Senior analyst Gergely Suppan said Takarékbank projects quarter-on-quarter GDP growth of 1-1.5% in Q3 and Q4, although acknowledging a chance that growth could reach 2%. He added that the forecast is "cautious" because of the unknown scale of the impact the chip shortage will have.

Takarékbank's "worst-case scenario" puts GDP growth at 7.3%, Suppan said, adding that even if the economy stagnated in the second half, full-year growth would still reach 6.8%.

He said the fourth wave of the pandemic is not expected to result in "drastic lockdowns" in Hungary, although people without immunity certificates could face restrictions.  

Takarékbank forecasts a 2.9% increase in retail sales this year, but expects a personal income tax refund for families with children, a pensioners premium and bonuses for soldiers to leave an extra HUF 1.2 trillion with consumers, giving retail sales "an enormous boost" in 2022.

GDP is already 0.9% over pre-crisis levels, he said, but pointed to imbalances, noting contributions to growth by the ICT, financial, insurance and real estate sectors, while the recreation, tourism and passenger transport sectors have yet to recover. The farm sector is also underperforming, but because of bad weather, he added.

Takarékbank analysts put average annual inflation at 4.7% this year before falling to 3.5% in 2022. He warned that higher raw material prices could cause "a big problem", adding that gas prices are already 30-50% higher in some European countries.

ADVERTISEMENT

80% plan to spend less due to inflation Figures

80% plan to spend less due to inflation

Lawmakers postpone expanded data provision for tourism secto... Parliament

Lawmakers postpone expanded data provision for tourism secto...

Dóra Petrányi to co-head CMS Tech, Media, and Comms Group Appointments

Dóra Petrányi to co-head CMS Tech, Media, and Comms Group

Budapest targets tourists with public transport fare hikes City

Budapest targets tourists with public transport fare hikes

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 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.