EBRD ups Hungary's 2011 GDP growth forecast.

By bne IntelliNews January 25, 2011
The EBRD improved its 2011 GDP forecast for Hungary to a 2% growth in the January edition of its Regional Economic Prospects report from 1.7% in the October forecasts. The projections for 2010 were also raised to 1.3% from 0.8% previously. Hungarys economy grew modestly in 2010 and only a slight acceleration is expected in 2011, the EBRD said. External demand will remain a stronger driving force for the countrys economy, rather than domestic demand, as seen from retail trade, credit extension and unemployment trends. The government has so far refrained from any wide-ranging expenditure consolidation, though it is committed to meeting targets under the EU excessive deficit procedure, the EBRD report said. The bank warned against a weaker investor confidence due to the lack of a credible medium term strategy and controversial measures, such as the nationalisation of the private pension funds. The EBRD also pointed out the lack of agreement between the government and the central bank regarding monetary policy and inflation.

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