The European Commission raised its projection for Hungary’s GDP growth this year to 4.6% from 4.4% in a quarterly forecast.
The government’s official projection for GDP growth this year is 4%, but Finance Minister Mihály Varga said earlier that higher-than-expected first-half growth of 5.1% could lift full-year growth to 4.3-4.4%. The EC left its forecast for next year’s GDP growth unchanged at 2.8%. It put GDP growth in 2021 at 2.8%.
The EC acknowledged in the autumn European Economic Forecast that Hungary had managed to withstand the global slowdown thanks to a domestic construction boom and a revival of the automotive industry, but it said support from these factors is “set to fade toward the end of 2019”. The EC sees investment growth plunging from 17% in 2019 to 2.1% in 2020 and 2.6% in 2021. Public investment is set to fall after Hungary’s absorption of European Union funds peaked in 2019, but private investment its seen rising further as real estate projects already in the pipeline are completed and several big manufacturing sector investments are completed, it said.