Compared to the previous expectations published in July the latest World Economic Outlook shows a 0.2 percentage points higher growth rate for this year and a 0.3 percentage points higher rate for next year. Accordingly, Hungary’s GDP growth is expected at 4 percent for 2018, which rate is roughly in line with the Government’s estimate.

The IMF observes in the publication, issued to coincide with the Fund’s annual meeting, that the world economy is nowadays facing rapidly changing challenges of which the deepening of trade tensions as well as geopolitical and domestic political uncertainty may pose the gravest risks. As a consequence, the IMF has cut its former estimate for global growth by more than 0.1 percentage point but growth predictions have become also more cautious regarding Germany, the euro-zone and the CEE countries. It is worth noting though that as far as Hungary is concerned the IMF has significantly raised the previous estimate and thus acknowledged the achievements of Hungary’s economic policy and confirmed the country’s growth potential. This step however did not come as a surprise: over the past four years the IMF made a positive revision of Hungary’s growth outlook in each bi-annual World Economic Outlook, thus altogether six times, similarly to other international entities (e.g. the European Union and the OECD).

The latest statistical data show that Hungary’s economy grew by 4.9 percent year-on-year in Q1 2018 and by 4.7 percent in the first half of the year. These figures are more than twice as high as the respective EU averages. This almost certainly makes the above 4 percent full-year GDP growth target attainable. This target is to be achieved parallel to stable public finances and a further reduction in the government debt-to-GDP ratio.

(Ministry of Finance)