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Ecostat forecasts GDP growth of 4% in 2006

Ecostat, the research arm of the Central Statistics Office forecasts 3.7% GDP growth for 2005 and 4% in 2006, the office announced. The cash flow-based fiscal deficit is expected to reach 5% of GDP this year, considering meeting the original target would require an additional Ft 350 bln in savings. The accrual-based deficit is likely to exceed 5% of GDP, including spending for motorway constructions. The accrual-based deficit, without motorway costs and adjusted for the effect of pension reform, is expected to be 3.9% of GDP, 0.3% points higher than targeted. Ecostat expects next year's deficit to be 3.4% of GDP as opposed to the 2.9% planned by the government. Investments are expected to rise 8.6% this year, and by 7% in 2006. Ecostat puts average inflation at 3.7% this year, and at 2% next year. Ecostat puts the current account deficit at €6.9 bln in 2005, and a slight €100 mln lower in 2006.