World Economy

Hungary GDP Forecast Raised

Hungary GDP Forecast RaisedHungary GDP Forecast Raised

The Organization for Economic Cooperation and Development raised its projection for Hungary’s GDP growth next year to 2.4% from 2.2% in the previous outlook released in June, NewsNow reported. The OECD stood by its 3% projection for growth this year and it forecast–for the first time–GDP growth of 3.1% for 2017. “Economic growth was strong in 2015 but is projected to slow in 2016 as public investment declines and the fiscal stance becomes less accommodative,” the OECD said. “Activity should rebound in 2017 on the back of renewed public investment. Private demand should remain fairly robust over the coming two years.” It said domestic risks for growth were mainly on the upside, while downside risks were mostly external. With a concentration of automotive companies in its industrial sector, and a faster-than-expected normalization of monetary policy in the United States, could force the National Bank of Hungary to tighten its own policy rate earlier than expected. The OECD projects Hungary’s budget deficit will narrow from 2.3% of GDP in 2015 to 1.9% next year and 1.5% in 2017.