GKI forecasts fewer investments and economic slowdown

GKI Economic Research Zrt. forecasts a 2.3-percent economic growth in 2016 (after the 3.7-percent expansion in 2014 and the 2.9-percent growth in 2015). Data from the beginning of the year indicate a slowing down of the Hungarian economy. In industrial production a 5.5-percent improvement is likely to occur this year. Compared with last year, the expansion in retail turnover also lost speed, but it managed to remain dynamic. In comparison with the 4.4-percent average, FMCG product sales increased much less at a 1.7-percent rate.

This year 5 percent fewer investments are expected to be realised. Consumer prices elevated 0.3 percent in Q1 2016 – but prices got 0.2 percent lower in March if compared with the third month of 2015. GKI reckons that the level of inflation will be around 0.8 percent in 2016. Gross wages increased by 5.9 percent in the first two months and net wages were up 7.5 percent. Real wages are expected to grow by more than 5 percent in 2016 and real income growth is forecasted to exceed 3 percent. This might speed up consumption, the rate of which may reach 3 percent after last year’s 2.6 percent.