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World Bank report on 2007-2008 projections

Analysis

GDP growth in Hungary is expected to come in at 3.8% this year by the World Bank’s latest annual economic growth report, which anticipates a slowdown to 2.5% in 2007 and a somewhat higher 3.4% in 2008.

As regards the next two years, the forecast is more optimistic that the estimates of the Finance Ministry or the National Bank of Hungary (MNB), but very much in agreement with local macroeconomic analysts who predicted a decline in GDP due to a slowdown in new investment and consumer spending.

Overall, GDP in Europe is projected to slow to about 2.1% in 2007 and 2008, and there is nothing in the forecast to dispel concerns voiced by a recent European Commission report, which warned that Hungary’s national economy may lag behind high-growth regional competitors such as Slovakia or the Czech Republic but also some EU-15 countries.

In the World Bank’s estimation, Hungary’s current account deficit should gradually decrease from approximately 8% in 2006 to 6.7% next year and to 6% in 2008. However, this year’s spectacular foreign trade boom will probably slow down in the next 12 months. (Világgazdaság)

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