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GDP growth: Modest acceleration expected to occur in second half
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According to economic research corporation GKI, the growth of the Hungarian economy has been lagging behind in 2016 compared to that of last year and other countries of the region; however, some acceleration is likely to take place in the second half of 2016, vg.hu reported.
The Hungarian economy grew by only 1.7 % in the first half of 2016 as opposed to a 3.1 % increase in the first half of 2015. In addition, according to statistics used in the EU, the GDP growth was only 1.2 % in the first half of the year.
Although the growth in the second quarter of 2016 was considerably higher than in the first one, and further acceleration is expected, it is unlikely that the annual growth rate will reach 2.5 % as expected by the government or 2.8 % as projected by the National Bank of Hungary (MNB), GKI’s economic forecast claims.
GKI maintains its GDP growth forecast of 2 % for this year, but a lower growth rate is more probable than a higher.
The study also reveals that not only did Hungary’s GDP growth lag behind most of its regional competitors in the first half of 2016 – the Polish rate was 2.8 %, the Slovak 3.7 % and the Romanian 5 % – but the EU average, which was 1.8 %, as well.
Furthermore, GKI emphasizes that an implicit change aimed at deteriorating the disequilibria has been initiated in the economic policy in the past couple of months. Based on the quantitatively favourable figures at the beginning of the year, the government modified the 2016 budget in June, distributing some HUF 500 billion (EUR 1.62 billion).
Furthermore, the government has promised a package of economic stimulating measures by the autumn. In addition, it will have unavoidable expenditures due to, for example, the repeatedly recurring debts of hospitals.
The analysis also mentions that in the first half of the year industrial production was 2.3 % higher than a year ago, and in June the level of production was barely higher than in December last year. In the first half of 2016 the fall in construction output exceeded 25 %.