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Ecostat predicts Hungary's GDP to contract 1.3%-1.5% in 2009

Ecostat, the research arm of Hungary's Central Statistical Office (KSH), said that it expects Hungary's GDP to contract between 1.3%-1.5% in 2009.

Ecostat also projects a 2% fall in household consumption and a 1.8% decline in communal consumption next year.

KSH's research arm forecasts an average unemployment rate of 8.6% in 2009, with 30,000 newly unemployed people during the year.

Ecostat predicted that the general government deficit could drop to 2.7% of GDP in 2009, while inflation could fall to an annual 3.2% next year.

Ecostat Director Pál Belyó said the recession will last nine to twelve months in Hungary.

Belyó added that the Central BANk (MNB) may make another 0.5% cut in the base rate this year. Ecostat projects a base rate of 7%-7.5% at the end of 2009, while it expects the euro-forint exchange rate to fluctuate in the 260-270 range next year. (MTI – Econews)