GKI: Falling behind more and more

The 2012 forecast of GKI Economic Research Co. proved to be almost completely accurate: GDP fell by 1.7 per cent in Hungary. Only stagnation can be expected this year, and the lagging behind of the Hungarian economy in the region continues. Inflation will slow down significantly by more than 2 percentage points due to non-market based measures of the government to reduce gas and electricity prices. Thus, real wages will rise modestly but temporarily. However, new austerity measures can be expected in order to avoid the excessive deficit procedure, which seems to be the main purpose of the government. It is likely that these measures will mainly affect the business sphere, including the banking sector; however, their extra burdens will be passed on to the general public and companies, further reducing the propensity to invest.

You can dowmload the forecast from here.