In its second annual Economic Outlook report released on November 21, the OECD increased its forecast for Hungarian GDP growth this year to 4.6% from a previous 4.4% and to 3.9% from 3.6% for next year.
Last month, the IMF (International Monetary Fund) also increased its forecasts to four percent this year and 3.3% in 2019. The OECD said growth was mainly driven by domestic demand, rising real incomes, high consumer confidence and supportive macroeconomic policies. It also noted that unemployment fell to a historical low of 3.6% this year. It also said, however, that the inflation rate rose to 3.8% in October, above the Central Bank’s 3% target and inflationary pressure will remain, thus the Central Bank should increase interest rates in order to both contain inflation and prevent the economy from overheating.
The OECD’s current 2018-2019 GDP forecast for the other Visegrád countries stands at 3% and 2.7% for the Czech Republic, 5.2% and 4% for Poland and 4.1% and 4.3% for Slovakia.