EC sees weaker growth

Hungary’s economy is expected to grow 2.2% next year, slowing from 2.8% this year, the European Commission says in its Spring 2015 Economic Forecast. “Hungary’s real GDP grew by an impressive 3.6% in 2014, but is set to slow down to more sustainable levels of 2.8% in 2015 and 2.2% in 2016 as growth-supporting factors, such as a record EU funds absorption, lose strength,” the report says. It adds that the budget deficit is expected to fall below 2.5% of GDP, citing “the strong economic recovery and improvements in tax administration” among factors for improved revenues. It also forecasts falling employment. “In 2014, the unemployment rate decreased to a low of 7.7% and is forecast to decline further” to 6.8% in 2015 and 6% in 2016. Domestic demand is expected to remain the main driver of economic growth but with a shift from investment to private consumption.