World Bank raises GDP growth forecasts for Hungary

Hungary’s economy will expand by 3.7% in 2017 and the growth will be maintained in 2018, the WB forecast in its latest Global Economic Prospects report. The forecast for this and next years was revised noticeably up from the previous report in January. We think that the positive revision reflected a more explicit inclusion of the Nov 2016 wage agreement in the projection. The favourable GDP growth print in Q1 was likely also a factor for the improved growth outlook. Accelerated absorption of EU funds will boost investments in Hungary this year, the WB said. It projected growth to slow down to 3.0% in 2019, in our opinion reflecting the expiration of the fiscal stimuli to growth. In comparison, the government projects 4.1% economic growth this year and 4.3% in 2018 and gradual but less pronounced slowdown in 2019-2021.

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