Country Forecast Hungary Updater
The Economist Intelligence Unit, May 2013, Pages: 17
The centre-right Fidesz-Hungarian Civic Union (Fidesz) has the strongest mandate of any government since the fall of communism. Real GDP fell by 1.7% in 2012. Another shallow recession in the euro zone in 2013 will have a negative impact on Hungarian growth, and The Economist Intelligence Unit forecasts only modest real GDP growth of 0.8% in 2013. Annual average growth of 2.4% is forecast for 2014-17 as domestic demand recovers gradually. After falling in 2013, the forint is set to stabilise and then appreciate gradually against the euro, starting in 2014. It will, however, remain subject to volatility. Fiscal consolidation helped to narrow the budget deficit to within the EU-mandated limit of 3% of GDP in 2012, but it is expected to widen again, to 3.5%, in 2013. Following two large bond issuances in February, concerns over the size of public debt persist. Inflation is forecast to reach 4% in 2013 and average 4.2% in 2014-17. The current account will slip back into deficit in 2013.
The EU and Council of Europe have begun to increase the pressure on Hungary after parliament amended the constitution on March 11th, with Fidesz using its two-thirds majority to curb some personal freedoms and, in theory, to protect its future actions from constitutional scrutiny.
Unorthodox economic and monetary policies may boost growth in the short term but are likely to have a longer-term negative impact on the health of the banking sector and foreign direct investment.
Country Forecast Hungary Updater
Hungary at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Country forecast overview: Highlights
Country forecast overview: Key indicators
Country forecast overview: Business environment rankings
Country forecast overview: Hungary's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure
Fact sheet
Outlook for 2013-17: Political stability
Outlook for 2013-17: Election watch
Outlook for 2013-17: International relations
Outlook for 2013-17: Policy trends
Outlook for 2013-17: Fiscal policy
Outlook for 2013-17: Monetary policy
Outlook for 2013-17: Economic growth
Outlook for 2013-17: Inflation
Outlook for 2013-17: Exchange rates
Outlook for 2013-17: External sector
Data summary: Global outlook
Data summary: Gross domestic product, current market prices
Data summary: Gross domestic product, at constant prices
Data summary: Gross domestic product by sector of origin
Data summary: Growth and productivity
Data summary: Economic structure, income and market size
Data summary: Fiscal indicators
Data summary: Monetary indicators
Data summary: Employment, wages and prices
Data summary: Current account and terms of trade
Data summary: Foreign direct investment
Data summary: External debt
Data sources and definitions
Global data
Domestic data
Abbreviations
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