The economy takes a step back – optimism didn’t last

The autumn is expected to bring a negative turn in the economy, due to changes in taxation and the 2015 budget. Growth rate will probably be around 2.5 percent in the second half of 2014 and 2 percent in 2015 – reports GKI Economic Research Zrt. Political crisis situations all over the world and close to Hungary have negative influence on world economy. There will be a reduction in the funding we receive from the European Union, and by 2015-16 it is quite likely that the level of investment will drop in Hungary. Calculated as a percentage of the GDP, Hungary targets a 2.4-percent budget deficit for 2015. In 2013 net EUR 1 billion working capital came to Hungary, but if we deduct the safety-purpose EUR 1.9 billion received by the bank sector, there was actually a capital outflow. What is more, it is increasingly expensive to bring investment into Hungary, as it is well indicated by the case of the Apollo tyre factory: after every new employee the company receives HUF 30 million in subsidies, 3-4 times more than earlier. All the news about corruption in Hungary will also result in more cautious investor behaviour and it may also become more difficult to access EU funding.

Udvardi Attila
kutatásvezető
GKI