Record speed in the first quarter

Attila Udvardi
head of research
GKI

In the first quarter of 2019 the Hungarian economy defied expectations and didn’t slow down; on the contrary, it accelerated to reach a record speed. Thanks to this, GKI modified its GDP growth forecast of March from plus 3.5 percent to 4 percent. Instead of the 7-percent investment rate GKI now predicts a 13-percent investment level and a 4.3-percent consumption growth (the former prediction was 4 percent).

At the same time inflation is also likely to speed up from 3.2 percent to 3.7 percent. However, the second quarter is sure to have brought a slowdown, due to less funding received from the EU, the rapid salary increase and a lower level of export. It is unlikely that the 4-percent growth rate of the economy that the government has envisaged will be maintainable in the long term. //