Slower growth, but lower inflation too

Attila Udvardi
head of research
GKI

Economic growth was 5.1 percent in Hungary in the first half of 2019. This growth rate was the fastest in the EU – three times faster than the average. The 3rd quarter started well in July, but August brought a slowdown in the industry and in building/construction. However, the inflation rate has also been getting smaller since May, altogether by 1 percentage point until September.

Retail sales aren’t likely to slow down in the second half of the year either. Annual sales growth is expected to be around 6 percent in 2019 and 4 percent in 2020. The level of employment has kept increasing, in July-September 2019 0.8 percent more people were working than a year earlier, while the number of public workers reduced by 30,000.

Calculated without public workers, salaries at business enterprises augmented by 11.3 percent in the first eight months of the year, while at budgetary institutions they rose by 5.8 percent. This year real wages will grow by 7 percent on average and 2020 is expected to bring a 4-5 percent increase. Thanks to this trend, consumption will improve by 4.5 percent in 2019 and grow by 3.5 percent next year. //