Growth in domestic trade catches up with export

According to GKI Economic Research Zrt., in 2015 Hungary’s economy will grow faster than the European Union’s 1.8-percent average, but it has no chance of repeating last year’s 3.6-percent expansion rate. GKI’s forecast is that the economy’s growth rate will be around 2.5 percent. Hungary’s economy slows down this year because of the expected stagnation in investment; what is more, in 2016 the level of investment is expected to drop. EU funding reached its peak in 2014, it won’t grow any further this year and private capital investment is rather unlikely to increase. As for the 1st quarter of 2015, the building and construction sector’s performance improved by 9 percent, industry did 8 percent better and retail turnover was 7 percent above the base period level. After two good years the agricultural performance will probably worsen. Gross wages were up 4.1 percent in Q1 2015, but for the whole of 2015 the wage increase will be below 2.5 percent. Consumption is forecasted to speed up from last year’s 1.6-percent growth rate to 2.5 percent. Stagnation is expected in the level of inflation. After the spring strengthening the forint weakened in May. Hungary’s budget deficit is going to be around 2.2 percent in 2015.