EBRD slightly cuts Hungary’s 2014 GDP growth forecast to 1.6%

By bne IntelliNews May 15, 2014

Hungary's economy is projected to grow by 1.6% in 2014, speeding up from 1.1% estimated for 2013, the European Bank for Reconstruction and Development (EBRD) said in the latest edition of its Regional Economic Prospects report published on May 14. The bank slightly revised down the estimate from a 1.7% y/y GDP growth expected in January. The annual growth rate is projected to slow down to 1.2% y/y in 2015.

The EBRD noted that even though medium-term growth potential remains much diminished, recovery in domestic demand can give some impetus in the short term. The bank also highlighted that the 2.7% y/y GDP expansion in Q4 2013 was mainly driven by domestic demand which was supported by one-off factors, such as government-mandated utilities price cuts and the disbursement of EU funding at the end of the 2007-2013 budget period. It said that the second phase of the central bank’s Funding for Growth Scheme has begun only slowly and was unlikely to overcome the underlying lack of investment demand.

Hungary’s government sees this year's GDP growth at 2%. This projection is in line with the expectations of the OECD and the IMF. Earlier in May the European Commission forecast a 2.3% economic growth for Hungary, while the World Bank sees it at 1.7%.


Related Articles

Hungarian unions in full gear for first country-wide strike at Tesco stores

Union leaders are preparing for the first country-wide strike at Tesco stores in Hungary, which has unanimous support from workers, local media reported on September 4. This is just the latest in ... more

Russian development bank IIB signs off on debut Hungarian credit facility

The Moscow-based International Investment Bank (IIB) announced on August 9 that it has signed off on its debut credit facility in Hungary. The Russian-led IIB decided around five years ... more

Central Europe’s factories remain busy despite a summer lull in PMIs

Manufacturers in Central Europe reported a step back in activity and confidence in July, purchasing managers’ indices (PMI) released by IHS Markit on August 1 showed. While, the indicators still ... more