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May 16, 2017

Hungary's economy surprises analysts after reaching 4.1 percent growth in first quarter of 2017

Mihaly Varga, minister for National Economy, said that the first-quarter figure was “exceptionally good”. He added that the government expected the economy to expand by above 4 percent this year. No analyst or bank had projected such a strong rate of growth

Hungary’s economy has surprised analysts after growing by an annual 4.1 percent in the first quarter of 2017, the Central Statistical Office (KSH) has said. Estimates had originally been set at a 3.5 percent growth. 

The news goes hand in hand with a 7.8 percent increase in industrial production and a rise in domestic consumption. To put this into perspective, Eurostat’s predictions say EU average GDP growth within the same period was only 1.9 percent.

Mihaly Varga, minister for National Economy, said that the first-quarter figure was “exceptionally good”. He added that the government expected the economy to expand by above 4 percent this year, and given the performance so far, there was no reason to doubt the forecast. No analyst or bank had projected such a strong rate of growth, he added.

Meanwhile, Fitch Ratings has left Hungary’s sovereign credit rating unchanged, with a stable outlook. Fitch predicts accelerating economic growth in Hungary during 2017.

The IMF has also welcomed the good performance of the Hungarian economy in recent years. The report notes that these achievements have been equally facilitated by a supportive economic policy, the high absorption rate of EU funds and a favorable external market environment.

The IMF also highlighted the results of tax administration reforms, which had led to further progress in fighting the grey economy and enabled the more efficient collection of taxes.