Economic growth in Hungary could be near 3pc this year, says Fiscal Council head

Budapest, December 17 (MTI) – Economic growth in Hungary could be near 3 percent of GDP this year and around 2-2.5 percent in 2016, the head of the Fiscal Council said on Thursday.

Arpad Kovacs said Hungary’s public finance deficit is low and the debt burden from interest rates has decreased as a result of joint efforts by the government and the National Bank of Hungary.

The low inflation environment makes it possible for the central bank to lower its base rate further and pursue a loose monetary policy.

Kovacs noted that there is little appetite among companies for loans. They are not willing to take even low risks and this is impeding economic growth, he added.

According to Kovacs, the central bank has calculated that corporate lending would need to expand by 5-10 percent, or around 250-400 billion (EUR 791m-1.26bn) annually, but this is a long stretch because of restricted demand.

Source: http://mtva.hu/hu/hungary-matters