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Hungary: growth exceeds expectations

Official growth forecast for 2007 is 2.2%, but most recent numbers show that growth may well exceed 2.5% in reality, reported finance minister János Veres in an interview on Sunday, and added that public deficit will be lower than 6.4% of GDP.

Forecasts for 2008 exceed this year’s actual growth by 0.4%. Actual growth may go up to 3.5% or even higher. Public deficit might have decreased by the end of the year if not for the ongoing agricultural crisis and other legal procedures. Curving the black economy (presently at 17-18%) by 10% would trigger quicker growth, but this may take another four years, Veres said. Enforcing that businesses issue an invoice for every purchase as required by law is a principal target. Businesses found in fault at official audits thus will have to face increasingly severe sanctions (upper limit of a fine is Ft 100.000, - $542). Closing down businesses temporarily is a sanction that has not been used frequently so far. (