ICEG predicts surge of economic growth in Hungary, Romania

EU

The European Center of the International Center for Economic Growth (ICEG) said that among new EU member states in the Central Eastern European region, only Hungary and Romania would record higher economic growth in 2008 than in 2007.

The ICEG noted that Hungary's predicted 3.2% growth rate in 2009 would still place it near the bottom of the economic-growth list for that year along with Estonia and Latvia.

ICEG's quarterly forecast published on Thursday said that Hungary's economy will expand at a rate of 2.1% in 2008 and 3.2% in 2009.

ICEG attributes the projected rise in Hungary's growth rate to rising exports and a successful reduction of its fiscal deficit.

ICEG predicts that Hungary's general government deficit will be 3.8% of GDP in 2008 and 3.2% of GDP in 2009.

A drop in the government's financing needs and a rise in domestic savings will make Hungary less exposed to global capital markets, the institute noted.

Thanks to accelerating growth, Hungary's unemployment rate will drop 0.4 percentage points to 7% by 2009 following two years of stagnation, the research institute predicts.

ICEG projects that average annual inflation in Hungary will 6.4% in 2008 and 4.4% in 2009. Hungary will be the only country among the region's EU members where inflation will drop this year, ICEG said, noting the inflation will slow after rising to 8% last year. (MTI – Econews)

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