Hungarian economy ministry maintains growth projection for years ahead

The economy ministry said it maintained last year’s projection of 4.1 percent GDP growth in 2017 and a 4.3 percent increase in 2018, in a statement on its macroeconomic and budgetary forecast for 2017-2021.

The growth rate is seen slowing to 3.8 percent in 2019 and reaching 3.6 percent in 2021, according to the forecast.

The fresh midterm forecast projects the 2017 ESA deficit at 1.9 percent of GDP, lower than the respective 2.4 percent original projection. The ESA deficit ratio is expected to rise to 2.4 percent in the 2018 election year before a gradual drop until 1.2 percent in 2021.

The ministry projects Hungary’s debt-to-GDP ratio to drop further, to 72.4 percent at the end of 2017 from 73.9 percent at the end of 2016, and to 71.2 percent at the end of 2018. The debt-to-GDP ratio is then projected to drop below 70 percent and reach 62 percent by the end of 2021 according to the fresh forecast.

The indicator peaked at 79.9 percent in 2011 and has dropped since.

Inflation is seen averaging 2.4 percent this year, up from 0.4 percent in 2016, before rising to 2.7 percent next year and eventually stabilising at 3 percent — the central bank’s midterm target.