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Kopint-Datorg lowers forecast for GDP growth, raises inflation projection

Economic research company Kopint-Datorg Zrt has lowered its projection for Hungary's GDP growth for 2006 and 2007, while raising its inflation forecast.

In its latest projection published on Wednesday, Kopint-Datorg lowered its projection for GDP growth in 2006 to 4% from 4.3% forecast in July. It lowered the forecast for economic growth in 2007 to 2.8% from 3%. The research company projects investments will increase just 2% in 2006, compared to an earlier forecast 5.9%, while rising 2.5% in 2007, down from the earlier projected 4%. It has lowered the projection for growth of domestic consumption to 1.3% from 2.5%. The projection for 2007 shows domestic consumption falling 0.6%, as opposed to the earlier projection of a 1% rise.
Kopint-Datorg puts the current account deficit for 2006 at €6 billion, up from the earlier forecast €5.6 billion. The projection for 2007 was lowered, however, to €4.5 billion from €5 billion. The projection for 2006 is equivalent to 6.7% of GDP and the forecast for 2007 is equivalent to 4.6% of GDP. It puts the general government deficit in 2006 at 10.1% of GDP and the deficit in 2007 at 6.8% of GDP.
Kopint-Datorg notes that it has used the Finance Ministry's targets rather than make its own projection, due to a lack of information.