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Ministry raises GDP forecast to 3.1%

Parliament

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The Hungarian Ministry for National Economy raised its projection for GDP growth this year to 3.1% in a new forecast for 2014, Minister Mihály Varga announced yesterday.

An earlier forecast by the Ministry had put GDP growth at 2.3% in April. The increase is due to Hungary’s dynamic economy which is supported by a “healthy structure”, the minister said.

Growth will boost household incomes and consumption, improve the budget balance and have a positive effect on the job market; our new forecast meets the expectations of foreign analysts, Varga added.

Other governmental measures, such as raising teachers’ salaries in 2014 and rescuing foreign exchange debtors, could also boost consumption. But measures to compensate FX loan consumers will only start to impact on consumption in 2015, the Minister noted.

The current forecast for GDP growth in 2015, estimated at 2.5 %, could be revised once the impact of the FX loan rescuing plan is fully assessed, the Minister said, adding :  “We will examine that issue too once the planning of the budget reaches that phase”.

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