GKI predicts a tough 2012

Economic research company GKIpointed out it changed its GDP projections for Hungary to 1.5% growth in 2011 and a 1% contraction in 2012. GKI saw Hungary's economy expanding 1.5-2.0% in both years in a projection published at the beginning of September.

The company believes the general government will be in deficit, cleared of one-off effects, will reach 5% of GDP this year, compared to a 2.9% gap in 2010. Taking into account the transfer of private pension funds to the state, GKI expects the general government to run a 1% of GDP surplus. GKI chairman András Vértes said that, although the main figures of next year's budget have not yet been revealed, achieving a 2.9% deficit would require draconian austerity. He dismissed the government's 2.5% deficit target for 2012 as unrealistic.