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National Bank forecasts faster GDP growth

December 16th, 2016

A left-wing commentator doubts that Hungarian GDP growth will reach the 4 per cent figure in 2017 forecast by National Bank President Matolcsy. The leading online business site, however, thinks that Matolcsy’s optimistic estimate may be correct.

In a Parliamentary committee hearing, National Bank President György Matolcsy said that economic growth would speed up and reach 3.5 to 4 per cent in 2017.

In Népszava, Miklós Bonta finds Matolcsy’s forecast unrealistically optimistic. The left-wing columnist thinks that the Hungarian economy will grow by around 2 per cent this coming year. Hungarian growth is sluggish, and there is no reason to assume that it will speed up any time soon, as a serious shortage of labour severely limits the expansion of industrial output, Bonta argues. In an aside, he notes that without EU-subsidies amounting to 3.5 per cent of the GDP, the Hungary would be in recession. In conclusion, Bonta thinks that Matolcsy’s estimate is nothing more than window-dressing.

Portfolio, the leading online economic site contends that Matolcsy’s estimates are not at all groundless. According to Portfolio’s calculation, construction, industrial output, foreign investment and domestic consumption are likely to increase in 2017. In addition, higher public spending and infrastructural development will also boost growth. All this could make the fast economic growth predicted by Matolcsy possible even until 2020, Portfolio suggests. The authors acknowledge, nonetheless, that all this will depend on external as well as internal contingencies. Faster economic growth is possible only if agricultural output remains high and no global economic recession appears on the horizon.

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