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ICEG predicts 1.1% economic growth and 3.8% inflation in 2009

The European Center of the International Center for Economic Growth (ICEG) said on Friday it expects Hungary's economy to grow by 1.1% and inflation rate to be 3.8% in 2009.

ICEG researcher Gábor Kutasi said Hungary's inflation rate is expected to decrease due to the decline in the price of oil, raw material and food.

ICEG researcher Gábor Pellényi commented that EU support could help to mitigate the credit crunch in Hungary, adding that employers are not able to generate sufficient financial resources on their own.

ICEG predicts that Hungary's unemployment rate will climb to 8% in 2009 from 7.8% in 2008, noting that this increase is particularly unfavorable because it will likely take place within the context of a slowing economy.

ICEG forecast an average euro-forint rate of 252 in 2009, predicting that Hungary's government debt would rise to 67.2% of GDP in 2009, compared to 66.6% in 2008.

The ICEG researchers predicted that Hungary's Central Bank key-rate will not change from its current rate of 8.50% this year, while the rate is likely to begin to decline in 2009, falling to 7.0% by the end of the year. (MTI – Econews)