Hungarian economic growth has proved to be balanced and stable, and is expected to reach 3 percent in the first quarter this year, Minister of National Economy Mihály Varga has said after the Central Statistical Office announced that output grew by an annual 2.9 percent in 2015, and in the final quarter expanded 3.2 percent year-on -year. The government’s strategy and the effects of reforms are showing, Varga said. The structure of the economy had changed. It was more balanced and growth was healthier, while industry was more dominant. András Balatoni, the chief analyst of ING Bank, said the dynamic growth on the demand side is likely to have been caused by a peak in investments after the acceleration of the disbursement of European Union funding for the previous seven-year period at the end of last year. Consumption and net exports probably also made a substantial contribution, Balatoni said. He forecast 2-2.5 percent annual GDP growth in 2016. Gergely Ürmössy of Erste Bank also noted that the government drew down all available EU resources by the end of 2015. Further, the government used a year-end budget buffer to finance investments, Ürmössy added. He predicted 2.2 percent GDP growth for 2016, pointing out that Hungary continues to fall behind regionally as Slovakia’s economy grew 4.2 percent and Romania’s 3.7 percent, although it far exceeded GDP growth in eurozone member states in 2015. Gergely Suppan of Takarékbank forecast 2.5 percent GDP growth for 2016 and said it could accelerate again in 2017, partly due to faster drawdown of EU funding and partly to the cut in the VAT rate on home construction and the expansion of the home purchase subsidies. He predicted 2.8-3 percent economic growth for 2017.
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