Growth of domestic demand slowing down

According to a forecast prepared by GKI with the help of Erste Bank and published on 30. October, the political situation will consolidate, corrections will be implemented, and reforms will gradually begin and accelerate. Investor confidence and the forint will also get stronger.
Hungarian GDP is expected to grow by 4 per cent this year. Though the growth of domestic demand is slowing down, exports are increasing rapidly. The balance of foreign trade will be similar to that of last year (EUR 2,8 billion – 3.3 per cent of the GDP). Budgetary restrictions will not have a major effect on the growth rate yet. As a result of tax increases, net incomes will not rise significantly, while inflation will accelerate. The growth of consumption is expected to stop by the end of the year, while investment will not show growth of more than 5 per cent. GKI expects the money markets to regard economic policy as increasingly credible, which means the exchange rate will improve till the end of the year (with annual average rate around 266 HUF/EUR) The prime lending rate is not expected to exceed 8 per cent this year.