The analysts of the European Bank for Reconstruction and Development (EBRD) share the view of the Government and see a bright economic outlook for Hungary, Minister for National Economy Mihály Varga said following the annual meeting of the Bank held in Amman, Jordan. The Minister said that Hungary’s economic policy now received recognition again after the IMF had earlier also upwardly revised economic growth expectations for Hungary.

In a study titled Regional Economic Prospects, which was published concurrently with the annual meeting, the EBRD revised upward a former prognosis on Hungary’s economic growth for this year: the 3.8 percent GDP growth estimate is up by 0.4 percentage points compared to the figure predicted in the study published in November. Thus, after the IMF, the EBRD has also come to acknowledge the achievements of Hungary’s economic policy and turned more optimistic with regard to the country’s outlook.

The EBRD study highlights the fact that, driven by strong internal demand, Hungary’s economic growth accelerated and hit 4 percent of GDP in 2017. Following a downturn in 2016, investment grew by 16.8 percent, the second largest rate of growth within the EU. Buoyant investment activity was attributable – besides the utilization of EU funds – to recovery in corporate lending. After September 2009, private sector lending had returned to growth for the first time in April 2017, and the share of non-performing loans in the sector dipped to below 5 percent by the end of the same year. Consumption growth -- the main growth engine of this increase – has been fuelled by robust disposable income growth.

Despite the fact that the Bank’s expectations are below those of the Government, which prognosticate economic growth of 4.3 percent for 2018, it is certainly a positive sign that the EBRD has turned more upbeat on Hungary’s economic growth in 2018, the Minister for National Economy stressed.

(Ministry for National Economy)