Sunday , June 13 2021

The OECD is already expecting nearly five percent growth from Hungary

From the previous 4.4% to 4.6%, Hungary's OECD growth forecast in 2018 has improved, but next year it is 0.3 percentage points more hope for Hungarian growth than it was before, the finance ministry announced last Wednesday.

The organization's recent Outlook Outlook publication, published in the autumn, reports on stable public finances, a reduction in public debt, and even a reduction in unemployment in Hungary for the coming years. Lastly, the European Commission has increased its growth forecasts in the Hungarian economy by 4.3 percent, but other international organizations have exceeded their expectations in the recent past – writes the portfolio.

OECD expects Hungary's unemployment rate to fall to 3.6 percent historical fall this year, followed by a downward trend, as the number of employees continues to rise. The Paris organization notes that wages have increased by 12 percent in the first eight months of 2018, thanks to a six-year salary agreement between the government and employers and wage increases in the public sector. They say that, thanks to the family tax relief scheme and targeted VAT cuts, there are still more money for Hungarian families, which contributes to an increase in consumption.

Debt may continue to decline

Based on the advanced price trends, the OECD expects inflation of 3 percent predicted by the central bank this year, mainly due to rising fuel prices that affect most production areas. According to the organization, in the coming years, the general government deficit could fall below the 3% threshold according to the Maastricht convergence criterion, while public debt could continue to decline.

Photo: AFP / Eric Piermont

The OECD believes that investing in housing and expanding the capacities of enterprises will keep the investment environment unchanged. For the first, the government's home-based program, which contributes to reducing corporate tax and proper use of EU funds. At the same time, it is also noted that, in order to improve the productivity of small and medium-sized enterprises, it is necessary, inter alia, to improve the innovative and regulatory environment and the continued development of human capital, in line with the ideas for improving the competitiveness of government . According to the OECD, tensions in international financial markets and the unwieldy Brexit can pose external risks to the Hungarian economy – the ministry writes.

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