IMF improves Hungary’s 2013 GDP projection to 0.2%.

By bne IntelliNews October 9, 2013

Hungarian economy is expected to grow by a real 0.2% y/y in 2013 after contracting 1.7% y/y in 2012, the IMF said in the October 2013 edition of its World Economic Outlook. The GDP will expand by 1.3% y/y in 2014. In the April edition of the report, the IMF was expecting stagnation in 2013 and a 1.2% y/y increase in 2014.

After sharp deceleration of the annual inflation to 2.3% in 2013 from 5.7% in 2012, consumer prices will again speed up 3% in 2013, the fund said.

Hungary’s current account surplus is projected to expand to 2.2% of GDP in 2013 from 1.7% last year and to narrow again to 2% in 2014.

The IMF expects the unemployment rate to increase from 10.9% in 2012 to 11.3% in 2013 and edge down to 11.1% the next year.

Although, the country's fiscal position is forecast to deteriorate in the next two years, posting deficits of 2.7% and 2.8% of GDP, respectively, it will still be in line with government’s plan to keep the gap below the EU's limit of 3%.

In regional comparison, Hungary’s GDP will perform weaker than all European emerging economies (Croatia is a single exception in 2013), which are projected to grow by an average of 2.3% y/y in 2013 and 2.7% y/y in 2014.

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