In its spring economic forecast, the European Commission has projected Hungary's GDP will grow by 5 percent this year.
According to MTI, the projection was raised from 4 percent in the EC’s winter forecast released in February. Hungary’s government puts 2021 GDP growth at 4.3 percent. The EC’s fresh projection for average GDP growth for the European Union is 4.2 percent. The EC said Hungary’s economy was expected to expand by 5.5 percent in 2022.
“Household consumption is poised to rebound thanks to steady real income growth, and the increasing ability and willingness, of consumers to spend once restrictions are lifted,” the EC said. It pointed to the improving labor market’s positive impact on household income, the gradual reintroduction of an annual pensioners’ bonus, and a personal income tax exemption for Hungarians under 25 from 2022.
The forecast said rising capacity utilization as well as government subsidies are expected to boost private investment, while grants from the EU’s Recovery and Resilience Facility (RRF) are expected to keep public investment at around 6.5 percent.