Growth in external demand surpasses domestic demand growth

According to a forecast by GKI Gazdaságkutató Zrt. and Erste Bank, technically the recession ended in the 1st quarter of 2010 in Hungary as well and a 1-percent economic growth is expected for 2010 (the result of growing external demand and EU-financed investments). In May, the Greek crisis and its precarious management resulted in the weakening of the Euro. Several member states put on the agenda the mid-term revision of their budgetary balance, which entailed a decline in domestic demand and also restrained product turnover within the EU. The new government’s programme includes few concrete measures. In the light of the Greek crisis, it seems that the budget deficit must be kept below 5-percent of the GDP – including the expenses of consolidating and reform measures. In April, the level of inflation in Hungary was at 5.7 percent, the highest in the EU.