If Hungary's new-old government keeps its promises to launch reforms and reduce the public sector deficit, the forint will firm and interest rates will go down, economic think-tank GKI said in a forecast elaborated in co-operation with Erste Bank and released on Tuesday.
The GKI has raised its industrial output projection to 8.5% for 2006 from 7.5% in the previous forecast, but cut its annual construction growth estimate to 10% from 12%.
The think-tank now expects Hungary's gross average wage index at 6%, up from 5% in the early April report.
According to the GKI, the rate of unemployment will by 7.5% at the end of this year, while a month ago they expected it to come to 7.2%.
In other key projections (GDP, public sector deficit, inflation) there was no change implemented in the forecasts.
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