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EC sees Hungary economy contracting 1.6p% in 2009

  Hungary’s economy is likely to contract 1.6% in 2009 and expand about 1% in 2010, the European Commission forecast on Monday.

The forecast for 2009 is slightly smaller than the 1.8% contraction the Commission forecasts for the EU as a whole and the 1.9% contraction forecast in the euro zone. The forecast for Hungary is also more optimistic than a revised target the government is expected to announce soon. The European Commission on Monday forecast Hungary’s fiscal deficit would narrow to 2.8% of GDP in 2009.

The government targets a budget deficit of 2.6% of GDP in 2009, but there are concerns the deficit could exceed the target because of a bigger than expected economic contraction and lower than projected inflation. (MTI-Econews)