Hungary's economy is projected to grow by 0.7% y/y in 2013, the central bank said in a new forecast slightly improving its previous estimate for a 0.6% y/y expansion expected in June. The bank also revised up its GDP growth projection for 2014 to 2.1% from 1.5%.
This year Hungary's economic growth will continue to be driven by external demand. Household consumption will also have a positive contribution as it is expected to increase by 0.4% y/y in 2013, after contracting 1.4% y/y in 2012. On the other hand, investments will further decline by 1.3% y/y in 2013, albeit at a slower pace than in 2012 whet they shrank by 3.8% y/y. Moreover, investments would reverse to a 7.8% y/y increase in 2014, which together with rising external demand will contribute for acceleration of the GDP growth next year.
The bank expects gross average earnings to increase by 3.3% y/y in 2013 and by 4.5% y/y in 2014. Employment is projected to pick up by 0.8% y/y both in 2013 and 2014.
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