Primarily due to the statistical effects of the performance of investments that had been much lower than previously expected, GKI raised its GDP forecasts for 2017 to 3.2 per cent from 3 per cent. It is halfway between the projections of the IMF (3 per cent) and the EU (3.5 per cent), and it is lower than the expectations of the Hungarian government (4.1 per cent). As far as production is concerned, it will be boosted by construction, which has already been able to work off a large proportion of its decrease last year, and trade, which was already expanding rapidly last year. Growth can be projected in all sectors, with the exception of agriculture, where a “natural decline” can be expected after last year’s uptick. Inflation will accelerate. Although external and internal equilibria will deteriorate slightly, they remain favourable. No substantial improvement can be expected in the main factors determining long-term development (in terms of the functioning of institutions, maintaining specific regulations, neglecting market solutions, and starting real structural reforms). Although the government frequently emphasises the importance of competitiveness, it is no more than empty lip service.
You can download the forecast from here.
