Fast Market Research

Just Released: "Hungary Business Forecast Report Q3 2014"

New Country Reports market report from Business Monitor International: "Hungary Business Forecast Report Q3 2014"

 

Boston, MA -- (ReleaseWire) -- 05/21/2014 -- Hungary's economic recovery remains at risk due to its reliance on government current and capital spending, rather than the promotion of private sector fixed investment. Hungary's debt burden is already high by regional standards, and with the poor business environment continuing to deter businesses from investing, we remain reluctant to forecast a stronger recovery.

R ising inflationary pressures in Hungary on the back of increasing demand-pull factors, pass through effects from forint depreciation and fading base effects will press the central bank into hiking the main policy rate by end-2014.

Hungary's current account surplus will remain one of the most robust in emerging Europe in 2014 and 2015, as a eurozone recovery boosts exports. However, we continue to highlight the substantial short-term external liabilities that could leave the country rapidly if the country's business environment continues to deteriorate.

View Full Report Details and Table of Contents

Following the re-election of the governing Fidesz party on April 6, Hungary's policy programme will remain centred around supporting government revenues via punitive taxes on business, and populist rhetoric railing against the EU. With radical nationalists Jobbik now the main opposition we expect a more overtly nationalist agenda from the government in order to mitigate right-wing dissent.

Major Forecast Changes

Given the extent of cuts to the policy rate in 2014 we have revised our forecast for the year-end policy rate in 2014 and 2015, from 3.50% and 4.00%, to 3.10% and 3.60% respectively. We believe the central bank will be forced into hiking the policy rate by rising consumer price inflation in Q414, as base effects from the 2013 cuts to household energy tariffs wears off.

We have revised up our forecast for Hungarian real GDP growth in 2014 and 2015, from 1.7% and 1.9%, to 1.9% and 2.1% respectively. This is as a result of increased government spending ahead of the April general election, as well as the continued expansion of state fixed investment.

Key Risks To Outlook

With Viktor Orban's Fidesz party retaining power in the April 6 general election, the implementation of new or increased bank, telecommunications or utility taxes could lead to more foreign-owned companies withdrawing from the Hungarian market. This would pose significant risks to our fixed investment forecasts, as well as our overall growth outlook for the country.

About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

Browse all Country Reports research reports at Fast Market Research

You may also be interested in these related reports:

- Oman and Yemen Business Forecast Report Q3 2014
- Kuwait Business Forecast Report Q3 2014
- Serbia, Montenegro and Kosovo Business Forecast Report Q3 2014
- Brazil Business Forecast Report Q3 2014
- Chile Business Forecast Report Q3 2014
- Hong Kong Business Forecast Report Q3 2014
- Philippines Business Forecast Report Q3 2014
- Botswana Business Forecast Report Q3 2014
- Pakistan Business Forecast Report Q3 2014
- Lithuania Business Forecast Report Q3 2014