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Assembly line at Suzuki's plant in Esztergom, northern Hungary. (MTI/Attila Kovács)
Hungary IMF Economy

IMF increases Hungarian GDP forecast

Hungarian 2021 growth expected to be third fastest in the European Union

editor: REMIX NEWS
author: MTI

The International Monetary Fund (IMF) significantly increased Hungary’s economic growth forecast for this year and next, daily Magyar Nemzet writes.

The current forecast predicts a growth of 7.6 percent this year and 5.1 percent next year.

While the IMF did not cover Hungary in its previous report in July, its April 1 report forecast GDP growth of 4.3 percent for this year and 5.9 percent for 2022. In October last year, the IMF signaled a 3.9 percent GDP growth for Hungary by 2021. Last year, the performance of the Hungarian economy fell by 5 percent.

The current IMF forecast indicates 4.5 percent inflation in Hungary this year, after 3.3 percent last year and 3.6 percent in 2022. In the April forecast, the IMF indicated more moderate inflation, 3.6 percent by 2021 and 3.5 percent by 2022. This year’s inflation forecast in April was 0.2 percentage points higher than the October estimate of 3.4 percent.

The unemployment rate will be the same as last year’s 4.1 percent this year as well, and then drop to 3.8 percent in 2022.

In April, the IMF saw a Hungarian unemployment rate of 3.8 percent for this year and 3.5 percent in 2022. In October last year, the IMF still projected an unemployment rate of 4.7 percent by 2021.

Global outlook

The IMF marks a 5.9 percent increase in global gross domestic product (GDP) by 2021 in the World Economic Outlook (WEO) world economic forecast, followed by a 4.9 percent increase next year. In its revised version of the spring forecast in July, the IMF forecast GDP growth of 0.1 percentage points higher this year, and 4.9 percent growth next year.

According to the IMF’s latest global economic growth forecast, while the global economy will continue to recover from last year’s downturn, growth will be somewhat lower due to another wave of the pandemic.

Nearly 5 million people have already died in the coronavirus epidemic, and the proliferation of the aggressive delta variant poses a serious health risk that will prevent life from fully returning to normal, they wrote.

In its spring WEO forecast released in April, the IMF projected 6 percent GDP growth for this year and 4.4 percent growth for 2022.

The IMF pointed out that the smaller-than-expected expansion of global economic growth was due to slower growth in some countries, particularly the outlook for weaker performing developing countries due to the deteriorating epidemic situation.

At the same time, the disruption and delays in supplies experienced by developed countries have also played a role in curbing global GDP growth.