A lot depends on tax law and the budget

According to economic projections by GKI Gazdaságkutató Zrt. and Erste Bank, the conditions for economic growth are somewhat worse than previously reckoned. The growth rate of external demand will be slower than this year, while domestic demand will only revitalise slowly. Growth in 2011 will be around 2.5 percent – in 2010 it was 1 percent – and export- and investment-oriented. Budget deficit will shrink to a level around 3 percent. EU resources will expand, but the state’s decision making will slow down.

Export-driven industry will be the driving force behind the Hungarian economy. Retail turnover will improve by about 1 percent after this year’s 3-percent downturn. Real wages are expected to rise by 3 percent (after the 4 percent in the previous period) and the level of employment will not grow.