Pénzügykutató and Századvég revise Hungary’s GDP growth forecast for 2018

Two leading economic research companies raised Hungary's GDP growth forecast this week

Pénzügykutató – a leading economic research company - has revised Hungary’s GDP growth forecast for 2018 from 3.7 to 3.9 percent.

According to MTI, although the forecast is an improvement it still falls short of the government’s official projection of a 4.3 percent GDP growth for 2018.

Pénzügykutató said their revised prediction is supported by a favorable international environment, accelerated absorption of EU funding, a strong agricultural sector, loose budgetary and income policy and monetary policy stimulating the economy.

The company also stated that inflation could be around 2.3 percent this year, unemployment could fall as low as 3.5 percent and investments could grow by 9 percent.

What’s more, the tight labor market is expected to drive income growth, but the pace should be below last year’s 13 percent rise.

Economic research company Századvég also raised its GDP growth forecast for Hungary this year to 4.1 percent.

Reports suggest the raise was based on the industrial output and retail sales data released early in the year, which turned out better than expected.

Századvég projects investment growth of 7.2 percent, supported by EU-funded capital expenditures and new home construction. It sees exports climbing by 5.7 percent and imports by 6 percent. Average annual inflation has been put at 2.6 percent.