Real incomes: two years back in time

According to a forecast by GKI Gazdaságkutató Zrt, prepared with the co-operation of Erste Bank, the rate of economic growth will slow down this year but both the external and internal balance of payments will improve. Even though a two per cent decline in real income is expected, overall consumption will probably not be effected. The rate of growth depends primarily on the difference between the dynamics of imports and exports resulting from market trends in the EU. GDP will grow by 3 per cent at least in 2007, with an 8 per cent increase in industry, while commerce is expected to show near-stagnation. Gross incomes are expected to grow by 7 per cent in the business sector, but this will only mean a net increase of 4 per cent, translating into a 1-2 per cent decrease in terms of real income. Gross incomes will grow by 2 per cent in the government sector, while pensions will retain their effective value.