In comparison to the previous estimate of Hungary’s economic growth, analysts in the latest OECD Economic Outlook revised their prognosis upward, from 3.8 percent to 3.9 percent for the year 2017, and from 3.4 percent to 3.6 percent for the year 2018.

The Organization for Economic Cooperation and Development is expecting robust wage and investment growth driven by the six-year wage agreement concluded last November and tax cuts.

Experts of international organizations and market analysts are both predicting Hungary’s economic growth to accelerate on the back of the Government’s pro-growth measures in their studies published this autumn. The OECD paper expects wage and job growth to continue as the indisputable result of the six-year wage deal brokered in November 2016. Higher real wages are signalling consumption growth, while investment is being fuelled by the utilization of EU funds. Low interest rates are especially beneficial for private sector investment, while the implementation of home projects is set to be bolstered by housing incentives – the OECD remarks. In addition, favourable balance indicators are pointing to sustainable upward trends.

According to the OECD’s analysis, Hungary’s current account will continue to post surpluses, and the government debt-to-GDP ratio is also seen to remain firmly on a descending path over the forecast horizon.

International organizations, analysts, credit rating agencies and investors have all come to recognize the achievements and positive outlook of the Hungarian economy. The Government is committed to pursuing an economic policy based on wage increases, tax reductions and the bolstering of competitiveness. Thanks to the six-year wage agreement, the tax payable by employers is set to fall by 2.5 percent to 19.5 percent as of 1 January 2018.

(Ministry for National Economy)