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IMF lowers Hungary GDP projections

The International Monetary Fund (IMF) projects Hungary's economy will contract by 1% this year but grow by 0.8% next year, the IMF said in its World Economic Outlook published early Tuesday.

In the previous outlook, published in April, the IMF expected Hungary's GDP to stagnate in 2012 and grow 1.8% in 2013. But, in an announcement released after the first round of credit negotiations with Hungary in July, the IMF said Hungary's real GDP is expected to contract in 2012 and recover only modestly in 2013.

The IMF projects average annual inflation of 5.6% in 2012 and 3.5% in 2013. The forecast for this year was bumped up from 5.2% in the April outlook. The one for 2013 was unchanged.

The IMF lowered its projection for Hungary's current-account surplus in 2012 to 2.6% of GDP from 3.3%. But it raised the projection for next year's surplus to 2.7% from 1.2%.

The international body estimates unemployment will edge down from 11% last year to 10.9% in 2012 and 10.5% in 2013. In the earlier outlook, it put the unemployment rate at 11.5% for 2012 and 11.0% for 2013.

Hungary's government expects the economy to contract by 1.2% this year and grow by 1% in 2013, according to new projections announced at the beginning of October..

The government puts unemployment at 10.9% in 2012 and 10.7% in 2013.

The National Bank of Hungary projects GDP will fall 1.4% in 2012 and rise 0.7% in 2013, the central bank said in its latest Inflation Report in September.