Hungarian research company expects growth to slow before accelerating next year

Budapest, October 10 (MTI) – Pénzügykutató expects Hungary’s GDP growth rate to slow to 2.2 percent this year from 3.1 percent in 2015 because of dropping investments, but accelerate to 3.0 percent next year, the economic research company said in a forecast released on Monday.

Performance in the first half of this year has made it clear that growth halts as soon as the inflow of EU funding stops, the researchers said. Investments will rise again as soon as EU funds open up next year and employment will continue to rise, they said.

Pénzügykutató expects investments to drop 10 percent in 2016 and rise from a low base next year.

Contracting investments will be partially offset by rising consumption as real incomes are seen to rise by 7.7 percent this year and 3.5 percent next year. Pénzügykutató calculated the real wage increases assuming annual average inflation of 0.3 percent this year and 2.1 percent next year.