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Századvég lowers GDP growth forecast for 2011 to 2.8%

Economic research company Századvég has lowered its GDP growth forecast for Hungary this year to 2.8% from 3.1% in its previous forecast in March.

The forecast is slightly under the government's projection of 3.1%.

Századvég also lowered its GDP growth projection for 2012 to 2.7 from 3.6%.

Household consumption is expected to grow 2.1% in 2011 and 3.1% in 2012. Consumption will be supported by a 3.8% rise in gross wages, according to Századvég.

Consumer price inflation is set to fall to 4.4% in 2011 and 3.2% in 2012, close to the National Bank of Hungary's 3% "price stability" target. The central bank is likely to keep the base rate on hold at 6.00% until the end of this year, but lower it to 5.50% in 2012, Századvég said.

Hungary could run a general government surplus as high as 2% of GDP in 2011 because of assets transferred from private pension funds, Századvég said.

In its previous forecast, Századvég saw the surplus reaching as high as 3.6%.