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Hungary growth picking up to 2.3% in 2008 - extended

Economic think-tank Pénzügykutató projects Hungary’s economic growth will pick up to 2.0-2.5% -- though most likely 2.3% -- in 2008, while inflation will slow to 6%, Pénzügykutató chief analyst Mária Zita Petschnig said at a press conference in Budapest on Friday.

Hungary’s economy expanded around 1% and consumer prices rose 8% in 2007. In its latest macroeconomic forecast, Pénzügykutató projects investments growth will reach 2.3-3% in 2008. Household consumption will inch up just 1% after falling in 2007. Pénzügykutató puts Hungary’s 2008 current-account deficit at €5.3 billion ($8.4 billion). It sees the general government deficit narrowing to 4% of GDP. It sees the central bank base rate dropping from 8.00% to 7.50% by year-end. Asked whether Hungary would benefit from possible tax cuts in 2009, Pénzügykutató analyst László Antal said tax cuts should only be made in a quickly expanding economy, or if there is a political consensus. (MTI-Econews)