wiiw Current Analyses and Forecasts

Hungary: Gradual recovery amidst persistent uncertainties


Sandor Richter

in: Recovery - in Low Gear across Tough Terrain
wiiw Current Analyses and Forecasts No. 7, March 2011 , pp. 51-55

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In Hungary the economy is finally emerging from recession. Household consumption will increase at a very moderate pace in 2011 as income tax reductions primarily favour well-to-do families whose motivation to consume more is limited. Higher Forex debt service obligations in households will impose a drag on the recovery of consumption. Investment will recover from very low levels, mainly on account of three major FDI projects in the automotive sector. The highest contribution to GDP growth, however, will come once again from net exports. The outlook for 2012 and 2013 is extremely uncertain. While inertia alone would help the economy to achieve a gradual acceleration of the export driven growth, the massive uncertainties surrounding medium-term fiscal sustainability, future monetary policy and the attractiveness of the country for foreign investors leave important questions unanswered.


Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database

Countries covered: Visegrad countries, Hungary