Advances from EU funding are now paid sooner

According to GKI Economic Research Zrt., Hungary’s economy grew faster than expected in the 1st quarter of 2017. This growth slowed down a little in April but speeded up again in May. 2017 is forecasted to bring a 3.5-percent growth (last year’s growth rate was 2 percent). This year the external and internal balance will worsen a bit and inflation is going to grow, but in the short term these processes are acceptable. In 2016 the investment rate was 17.8 percent, which is relatively low for a country like Hungary. 2017 is likely to bring a 19-percent investment rate.

The new European Union grant programmes have been announced, but funding decisions will take 6-9 months to make. So far more than HUF 5,000 billion worth of funding has been granted; however, the spending from the 2014-2020 cycle’s financial resources has been less than half of this sum. What is more, the majority of payments made are advances, because the big projects have been given priority. Government deficit was very high at HUF 700 billion in June, while in the first five months of 2017 it had been hardly more than HUF 200 billion. //

Attila Udvardi
research manager
GKI