GKI: Consumption of households grows rapidly this year as well

As GDP, earnings and consumption grew faster than previously thought, GKI raised its 2018 GDP growth forecast from 3.8 per cent to 4 per cent. Although the foreign trade surplus is decreasing due to the rapid rise in domestic consumption, the external balance will continue to improve as a result of mounting EU transfers. Owing to the substantial advance payments from the general government necessary for accelerating EU transfers, the general government deficit in cash flow terms will be high and the decline in government debt will be modest. The EU is expecting an adjustment from the Hungarian government due to a high deficit compared to the favourable economic situation. Although the risk of escalating global trade war has declined, the Iranian, Turkish, and Italian situations have already had negative effects on energy prices and exchange rates.

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