Faster growth than expected, but it is losing speed

Attila Udvardi
research manager
GKI

In the 2nd quarter of 2018 the Hungarian economy grew faster than expected – and faster than most EU member states – but if calculated with the EU methodology, the dynamics have been losing speed for two consecutive quarters. According to market forecasts, this year’s more than 4 percent GDP growth will reduce to around 3 percent next year. Inflation is growing and it reached 3.4 percent in July, real wages are expected to increase by 7-8 percent and the consumption growth will peak at 4.5 percent. In comparison with the end of 2017, the unemployment rate is hardly decreasing, although the number of the so-called public workers is reducing (but there are still almost as many public workers as unemployed people).