The ICEG noted that Hungary’s predicted 3.2% growth rate in 2009 would still place it near the bottom of the economic-growth list for that year along with Estonia and Latvia.
ICEG’s quarterly forecast published on Thursday said that Hungary’s economy will expand at a rate of 2.1% in 2008 and 3.2% in 2009.
ICEG attributes the projected rise in Hungary’s growth rate to rising exports and a successful reduction of its fiscal deficit.
ICEG predicts that Hungary’s general government deficit will be 3.8% of GDP in 2008 and 3.2% of GDP in 2009.
A drop in the government’s financing needs and a rise in domestic savings will make Hungary less exposed to global capital markets, the institute noted.
Thanks to accelerating growth, Hungary’s unemployment rate will drop 0.4 percentage points to 7% by 2009 following two years of stagnation, the research institute predicts.
ICEG projects that average annual inflation in Hungary will 6.4% in 2008 and 4.4% in 2009. Hungary will be the only country among the region’s EU members where inflation will drop this year, ICEG said, noting the inflation will slow after rising to 8% last year. (MTI – Econews)
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