EBRD improves Hungary's 2011 GDP growth forecast to 2.7%.

By bne IntelliNews May 23, 2011
The EBRD revised its 2011 GDP forecast for Hungary to a 2.7% growth in the May edition of its Regional Economic Prospects report from the 2% increase projected in January. The more optimistic outlook is in line with the higher average growth in Europe (up to 4.6% in 2011 from 4.2% in the previous forecast), but still remains below the medium level. Hungarys economy expanded modestly in 2010 and only a slight acceleration is expected in 2011, the EBRD said. Hungary, along with Croatia and Bulgaria, is one of the countries where external demand is still the main driver of GDP growth and there are no signs of substantial revival in domestic demand. Although the government is committed to meeting targets under the EU excessive deficit procedure, no wide-ranging expenditure cuts were undertaken. The bank noted once more that controversial decisions, such as the implementation of extraordinary taxes on several sector and the nationalisation of the pension system, and the lack of a clear credible mid-term strategy can put off investors.
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