Record GDP growth in 2018

Commenting on the official announcement which puts the growth of Hungary’s Gross Domestic Product at 4.8 per cent last year, commentators predict a moderate slowdown, while recognising that the growth figures eventually surpassed even the optimistic forecasts.

Figyelő’s Csaba Szajlai remarks that even mid-year expectations were below the 4.5 per cent mark. He attributes the surprise growth figures to a combination of positive factors, including the government’s pro-growth monetary policy. While Hungary’s export markets have reported significantly slower growth than predicted, Hungary could grow faster than forecast thanks to the constant stimulus injected by the National Bank, mainly through its stubbornly low interest rates, he explains. Another important factor he mentions is the steady flow of foreign capital into the Hungarian economy. If the rule of law was as shaky as the government’s opponents claim, he concludes, capital would not trust this country.

Portfolio remarks that last year’s GDP growth as reported by the Central Office of Statistics is almost three times the growth within the Euro-zone. This year’s growth is projected at 3.5 per cent, still 2 points higher than the EU average. In a glimpse into next year’s prospects, the business analyst notes that EU transfers are running out and double-digit yearly wage increases are unsustainable, which will make it a hard, though not impossible job for Hungary to keep growing significantly faster than the EU average.

Tags: GDP, National Bank