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GKI stands by 2.5% GDP growth estimate for 2011

Economic research company GKI stands by its projection for GDP growth of 2.5% in Hungary this year, chairman András Vértes said at a press conference on Wednesday.

The projection is under the government's forecast for economic growth of 3.1%.

GKI lowered its projection for Hungary's ESA general government surplus for 2011 to 2% of GDP from 2.5% in a forecast in March. Without the transfer of private pension fund assets to the state, the general government would run a deficit of about 7% of GDP, Vértes said.

GKI also lowered its projection for the surplus in Hungary's combined current and capital account for 2011 to 3.5% of GDP from 4.3% in the previous forecast.

GKI left is forecast for average annual inflation for 2011 largely unchanged at 4.2%.

It sees the unemployment rate this year remaining around last year's level of 11.2%.

Hungary's economic indicators have improved as the global economic crisis has eased, but the country's real position is not any better than when Hungary's new government took office, Vértes said.

The government must introduce austerity measures this year which it avoided last year because its "unconventional economic policy" proved to be faulty, he added.