Last year was the best of the decade

Attila Udvardi
head of research
GKI

According to GKI’s estimation, the Hungarian economy grew by 4.6 percent in 2018 – this growth rate was exceptionally good in the European Union (ranked 2nd or 3rd in the company of Latvia, behind Poland). With this the country’s economic growth probably reached its peak, as for 2019 a 3.4-percent growth is forecasted. In 2018 the engine of Hungary’s economic growth was domestic use (which was up 6 percent), with the consumption growth at 5 percent.

While the inflation rate was 3.8 percent in October, by December it reduced to 2.7 percent – still it was the third highest in the EU. Then the Central Bank of Hungary (MNB) started a stricter monetary policy and the forint got 1.5 percent stronger. Also in December, instead of the usual end-of-year government deficit there was a nearly HUF 400-billion surplus, although this was mainly the result of the annual EU funding arriving in the last month of the year. In 2018 the deficit-to-GDP ratio was lower the originally planned 2.4 percent, probably around 2 percent, which was still one of the highest in the EU. The debt-to-GDP ratio reduced from the 73.3 percent in 2017 to around 71 percent. //