Mixed Forecast from GKI Think Tank, the GDP Will Stagnate This Year

GKI head András Vértes said Hungary's fiscal position is excellent compared to its peers in Europe.

If the new government remains committed to the current government's 3.8 pct-of-GDP deficit target, it can still be achieved, he added. A deviation of a few tenths of a percentage point would be insignificant, but anything bigger would need to be paired with structural reforms and, of course, discussed with the IMF and EU, he said.
According to GKI’s forecast, Hungary's GDP will probably stagnate in 2010, but the economy could slightly strengthen in the second half of the year. In the first half of the year, GKI sees industrial output to rise, along with exports, but it predicts domestic demand to fall further, unemployment rise even more and investments slow.
Trade surplus will be about EUR 3 billion for 2010, although companies will continue to build up inventories, causing imports to rise faster than exports. Investments are expected to rise 3 pct. GKI sees the unemployment rate peaking at 11 pct and puts the average annual rate at 10.7 pct.  Average annual inflation will be around 4.3 pct, according to the report.

News Monitoring