The European Commission projects Hungary's economy will expand 0.7% in 2009, according to its autumn economic forecast 2008-2010 published on Monday.
The Commission noted that the government's proposals in the government's revised 2009 budget, submitted to Parliament on October 18, as well as a high level of uncertainty on global financial markets could change the projection.
In the government's latest revision of the 2009 budget bill, Hungary's economy is seen contracting as much as 1% in 2009, instead of an 1.2% GDP increase assumed in the October 18 revised budget.
The Commission sees GDP growth in Hungary picking up to 1.8% in 2010. It put GDP growth in 2008 at 1.7%.
The start of economic in improvement in Hungary has been stymied by the global financial crisis, the Commission said. At the beginning of October, the country's government securities market came to a standstill, the share market plunged and the forint weakened sharply. The Commission blamed Hungary's vulnerability on its high level of external debt. (MTI – Econews)