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year 5: Cooler than last Forecast for 201
THE YEAR AHEAD
SPECIAL REPORT: VOL. 23. NUMBER 01
s may Official prediction than be more upbeat others, but everyone that seems to agree will growth in Hungary it was not be as hot as at the in 2014. We look s for economic projection the next 12 months. GABRIELLA LOVAS
crystal ball look into their economy When analysts see Hungary’s for 2015, they although at a slower continuing to grow, and with increased year pace than last The main external the downside risks. developments in inflation threats noted include as growth and European Union, to remain low this Bank in Europe are expected European Centraleasing year. Thus, the it turned out approximately a quantitative be a challenge. this month that of will probably launch Audi announced pace in 2015 may involves the purchase car manufacturer than in 2013. Keeping up that program, which slow growth, unit of German of more top On weak Hard to repeat: The Hungarian in Győr, nearly 50,000 government bonds. price cuts slowly governments and last year at its factory the regulated utility highly indebted developments in Greece 2 million engines projects after base, market−based As no such grand is no disappear from the the falling oil prices, banks, the recent impact on the eurozone been slackening. this year, there price cuts, namely and their potential of last utility This, in turn, could will be implemented the continuation keep the rate down. the central bank’s are also worrying. of geopolitical tensions reason to expect In 2015, Tóth expects will of increase rate East The implementation The escalation year’s dynamics. of 5%, tops. He agrees theoretically for further base and the Middle room for maneuver due to developments in Russia, Ukraine greatest threats cited capacity expansions industrial growth the be driven by domestic Tóth warns that of the carmakers’ are also among path that growth will he doubts that this alone cuts. external environment, extra caution unpredictable a policy. by analysts. The further uncertainties for demand, although for the slowdown in in the and investments gave with respect to monetary price of oil creates could compensate cardinal question is is needed businesses. this huge impetus to industrial the other areas. Another sphere will be private unemployment the jobs Decreasing active investments and growth last year. However,past how projects a slight far from year. Market−based Slower growth of the central bank increase, but it is the rate to concerns The have shown some which reflects industrial statistics in the unemployment Tóth expressed inflation, The 2015 budget, expectations, assumes of the decrease this sufficient, yet. a result of low that As official performance show 2015. in may 7.6% However, few months government’s over the expectedtoo. in the private sector 2.5% this year. Varga wage dynamics GDP growth of agricultural sector, in 2015. Minister Mihály $60 effect has been slackening. growth remain moderate National Economy however, that the that oil prices below GDP GKI points out, employees, has already said 2015 “genuine” inflation of Hungary’s raise number Subdued per barrel could percentage is rate in the are working in much as half of a only those who forecast for 2015 European growth rate by as The MNB’s inflation remaining including and excluding public workfare forecast. involved the favorable in investments at around 0.9% with inflation point above the official projection is more These ahead Hungary is significantly smaller than cycle, a surge of months immediately schemes, As usual, the official other forecasts. business by EU funding and a reduction In 2015, the negative in the most from the first half what official statistics show. to grow to boost purchasing and then gradually rising optimistic than bank (MNB) projects financed costs intended can be explained research firm expects employment rate to be Even the central The MNB utility In addition, Hungary’s international of 2015. The low figure price unemployment growth, at 2.3%. such as the low power. deteriorating of public by 1%, and the somewhat lower cost−side factors, Inflation Report is said to be further expansion economic by products and imported complete 7.5% due to the says in its December will primarily be assessment regulated government’s almost area, oil, the the of to euro and growth through in the schemes than further due that economic products. Inflation continues workfare of social support. demand rather of nationalizations trading partner, measures and policy market policy driven by domestic Hungary’s main agree that fiscal inflationary elimination “Improving labor acquisitions, anti−market a All stakeholders exports in 2015. low, thus external to maintaining inflation, accommodative suspected corruption. Gegely Tóth sees to be thus it will remain subdued. inflation remains committed conditions, low and easing prudential deficit level, and Buda−Cash analyst the GKI’s Hungary’s pressures The low government monetary conditions to the conversion of slowdown in In comparison, as with the below the 3% target. due year’s figure 2.4% of should remain is around 2%, support a considerable considerations growth from last loans will all The projection impact of the utility price ESA deficit is expected to reachdebt will foreign currency the central bank. The economic than 3% to 2.2% in 2015. set However, public capacity weakeningand tax increases, prices are GDP in 2015. expect a of more growth,” claims a snail’s pace, of carmakers’ the MNB both a huge reduction In contrast, Buda− to decrease at implementation government and investments gave increase in 2015. to remain subdued, continue household consumption. expansions and last year. to inflation analysts say. 2.8% increase in to industrial growth forecast of research the Cash expects this year. Tóth believes that According to the will grow by only 2% impetus the industrial statistics of 0.7% has at around GDP to the However, that this effect institution GKI, factors contributing away. past few months show this year, as the in 2014 are fading dynamic growth
PROJECTIONS FOR 2015 JANUARY 16, 2015 – JANUARY 29, 2015
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NEWS
Photo: MTI / Noémi Bruzák
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