Improving exchange rates in foreign trade, but domestic capital is still in waiting

According to a forecast by GKI Economic Research, despite that the Hungarian GDP grew rather rapidly at 3.5 percent last year, a slowing down commenced already in the 3rd quarter of 2014 and this is expected to continue in 2015-2016. This year’s GDP growth will be somewhere around 2 percent. Thanks to plunging oil prices in the world market foreign trade exchange rates will improve, so it is likely that the level of inflation will be even lower than predicted, consumption will increase and a more favourable external balance is probable. In 2014 the investment rate was up 15 percent (mainly due to EU funding) but in 2015 no expansion is expected in this domain. Because of problems with legal certainty the majority of Hungarian capital is in waiting – instead of realising investments. In 2014 real wages rose 3 percent. In 2015 a real wage increase of 1.8 percent is to occur. Hungary’s export speeded up a little last year, but despite the 1-percent improvement in the foreign trade exchange rate Hungary’s import exceeded the level of our export. This year our export will slow down but import will expectedly also do the same, perhaps to a greater extent. After the stagnation last year, Hungary’s foreign trade balance will grow from plus EUR 6.7 billion to plus HUF 8 billion. The level of inflation will be 0.5 percent.