Hungary's economic growth will pick up and its inflation will slow down this year

Based on the past months' developments, the extent of the changes is likely to be smaller than previously thought, economic think tank GKI said in a forecast elaborated in co-operation with Erste Bank.

 The
researcher expects further improvement of both the internal and
external balances and real wages to rise moderately in 2008. The GKI
expects last year's GDP growth at 1.5% yr/yr and sees it accelerating
to 3.2% this year, although the fresh figure means a cut from 3.5%
projected a month ago.
The think tank scaled back its
expectations for this year's industrial output growth to 7.5% from
8.0% previously and also grew less optimistic about investments
(+6.0% vs. +8.0% yr/yr) and construction (+8.0% vs. +10% yr/yr) from
a month ago.
It reduced its export and import growth forecast to
13% each from 16% and 14% respectively, and now expects Hungary's
trade gap to come in at EUR 0.3 bn this year, instead of EUR 0.7 bn
projected at the end of December.
The GKI raised its expectations
on the increase of the gross average wage index to 7.5% from 7.0%,
but also upped its forecast on the consumer price index to 5.7% from
5.0%.