Half way correction of course

The corrective economic measures seen at present in Hungary are being used at a time of economic boom in the EU and also of growing global uncertainty. The deficit of the budget is expected to be reduced by 3 per cent of the GDP this year. Cutting expenditure and boosting revenues both play an approximately equal part in the improvement. The deficit of the balance of current payments is expected to be only EUR 5.2 billion in 2007. The growth of GDP has slowed down to only 2 per cent. Industrial production shows a rise a of 8.5 per cent. Tourism and business services also show dynamic expansion, while revenues in retail trade and construction activities have declined by 2 per cent. According to a forecast by GKI Zrt., global growth is to slow down slightly. Hungary is expected to show the slowest growth and the highest budget deficit among the new EU states. The domestic consumer confidence index dropped dramatically in the summer of 2006 and has stayed low ever since. Expectations among industrial companies are above the ten year average. The basic priorities and tools of economic policy will probably remain unchanged in 2008. Consolidation of the budget, reforms and the acceleration of development using EU funds will continue to remain priorities.