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EC forecasts slowing growth, narrowing deficit

EU

The European Commission projected slowing GDP growth, but a narrowing general government deficit in its winter forecast published today. The EC estimated Hungary's GDP growth at 3.3% in 2014, 2.4% in 2015 and 1.9% in 2016. In its previous forecast, the EC predicted 2.5% growth in 2015 and 2.0% in 2016.

The EC projected the general government deficit would reach 2.6% of GDP in 2014, 0.3 percentage point below the official target and the autumn forecast. The EC put the deficit at 2.7% of GDP in 2015 and 2.5% in 2016. In the autumn forecast, the EC projected 2.8% deficit in 2015 and 2.5% in 2016.

It sees the country's debt-to-GDP-ratio increasing to 77.7% in 2014 mainly due to the weakening of the forint exchange rate. The state debt as a percentage of the GDP is expected at 77.2% in 2015 and 76.1% in 2016.

The harmonized consumer price index (HICP) was 0.0% in 2014, the EC said. For 2015, the EC revised its inflation forecast to 0.8% from 2.5% in the autumn forecast, citing the fall in oil prices and historically low inflationary pressures in the euro zone. In 2016, inflation is projected at 2.8%.

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