Economy
Hungary think-tank sees 2004 budget gap smaller than govt forecast
The report says Hungary's GDP should grow at a rate of 2 percentage points over that in the European Union, but noted that Hungary's economy is currently growing at the lowest rate among new EU members.
Hungary's public sector deficit in he January-September amounted to HUF 1,284.1 billion or 6.28% of gross domestic product and 96.2% of the annual target, which has recently been revised upward to 5.0%-5.3% of GDP from 4.6%.
The Finance Ministry said last week that the public sector deficit in October should be no more than HUF 5 billion off the HUF 50.7 billion target, adding that the expected HUF 100 billion deficit in November would be offset by a similar size of surplus in December.
GKI has maintained its GDP growth forecast for 2004 at 4.0%. In its previous survey it projected 4.3% economic growth for 2005, but this time the report does not include forecasts for next year.
GKI has raised its current account deficit projection for 2004 to EUR 6.6 billion (the same as in 2003) from EUR 6.5 billion in its previous report.
GKI still expects average annual inflation to come to 6.9% in 2004, and has put the December/December CPI to around 6.3%. Hungary's annual consumer price index was 6.6% in September and consumer prices were up by 7.0% year on year on average in the first nine months of the year.
The researcher projects 6.1% rate of unemployment for the year. Hungary's jobless rate was 6.1% on average in July-September.
GKI sees Hungary's base rate to be cut by 100 basis points to 9.5% by the end of the year. The base rate was reduced by 50 basis points on 18 October to 10.50%, which is still the highest in the European Union.
Personal consumption has showed some signs of slowing, GKI said. Although overall retail turnover rose 6% year on year in the January-August period, car sales increased by just 2% in annual terms in July through August, after registering double-digit growth in the first six months of the year.
Hungary's public sector deficit in he January-September amounted to HUF 1,284.1 billion or 6.28% of gross domestic product and 96.2% of the annual target, which has recently been revised upward to 5.0%-5.3% of GDP from 4.6%.
The Finance Ministry said last week that the public sector deficit in October should be no more than HUF 5 billion off the HUF 50.7 billion target, adding that the expected HUF 100 billion deficit in November would be offset by a similar size of surplus in December.
GKI has maintained its GDP growth forecast for 2004 at 4.0%. In its previous survey it projected 4.3% economic growth for 2005, but this time the report does not include forecasts for next year.
GKI has raised its current account deficit projection for 2004 to EUR 6.6 billion (the same as in 2003) from EUR 6.5 billion in its previous report.
GKI still expects average annual inflation to come to 6.9% in 2004, and has put the December/December CPI to around 6.3%. Hungary's annual consumer price index was 6.6% in September and consumer prices were up by 7.0% year on year on average in the first nine months of the year.
The researcher projects 6.1% rate of unemployment for the year. Hungary's jobless rate was 6.1% on average in July-September.
GKI sees Hungary's base rate to be cut by 100 basis points to 9.5% by the end of the year. The base rate was reduced by 50 basis points on 18 October to 10.50%, which is still the highest in the European Union.
Personal consumption has showed some signs of slowing, GKI said. Although overall retail turnover rose 6% year on year in the January-August period, car sales increased by just 2% in annual terms in July through August, after registering double-digit growth in the first six months of the year.
