The projection in the Organisation for Economic Cooperation and Development’s biannual forecast released on Tuesday is below the government’s 4% target.
Private consumption remains strong, helped by rising real incomes and high consumer confidence coupled with supportive macroeconomic policies, the report said. Investment growth is “buoyant”, supported by EU funding, housing subsidy schemes and expanding production capacity, it added. Hungary’s “strong recovery is an opportunity to introduce measures to improve fiscal sustainability, reduce old-age poverty and address access challenges in the pension and health system”, the OECD said. “Bolstering domestic SMEs should focus on improving business regulation, facilitating their integration into regional and national supply chains, and upgrading skills,” the report added.
Commenting on the report, Gábor Gion, state secretary for financial policy affairs, said the OECD’s forecast of 3.9% is close to the government target and Hungary’s growth will exceed the average growth of OECD members, as well as the EU average.