|
|
Hungary Business Forecast Report Q4 2008Published by: Business Monitor International Published: Jul. 28, 2008 - 57 Pages Table of Contents
AbstractMedium-Term CautionWe continue to hold a cautious medium-term outlook for the Hungarian economy, with a seriesof negative domestic and external factors weighing on growth until 010. On the domestic front,a weak Socialist minority government will ensure that the stalled reform agenda will remain thatway until after the general election in early 2010. At the same time, high interest rates and inflationalongside slowing credit growth and weak consumer demand will ensure that household consumptiongrowth continues to underperform. In terms of external variables, while we are forecasting globalenergy prices to come down after 008, they are still expected to remain at historic highs throughthe long term. At the same time, the eurozone economy - Hungary’s primary export destination- is expected to decelerate in 008 and 009, with real GDP forecast to expand by just 1. % inthe latter year. While the Hungarian minority government is expected to survive through to the end of its parliamentarymandate, we stress that its policy-making capabilities are likely to remain hampered andany potential for substantive economic reforms will be severely limited. Indeed, it now appears thatbeyond some minor reductions in the fiscal deficit, the Gyurcsany government lacks any significantpolicy agenda for its final years in office. The government is showing no inclination to revive thehealthcare reform bill which was defeated by referendum in March and its consistently weak pollingnumbers are likely to continue to prove a distraction. Despite Hungary’s weak medium-term economic outlook, the country’s long-term growth prospectsremain strong, with steady real convergence with the eurozone forecast for beyond 010. Indeed,between 010 and 01 , real GDP growth is forecast to accelerate to an average .8% annually,from 2.6% for the previous five-year period. Beyond then, growth is expected to remain robust at. % from 01 through to the end of our 10-year forecast period in 018. German automobile manufacturer Daimler has chosen Kecskemet, Hungary as the location for a newcar factory intended for the production of two new Mercedes-Benz brand models. The investmentis estimated to be worth EUR800mn and will create up to , 00 direct jobs, making it the largestforeign greenfield investment project in the country’s history. The plant is projected to produce100,000 cars per year, mainly for export, raising total annual vehicle production by approximately50% from current levels. The Daimler plan is an extremely positive signal that Hungary remains acompetitive destination for major FDI projects after several years of losing bids to Poland, Slovakiaand the Czech Republic. The factory will be a significant economic driver for the country over thelong term, with indirect job creation through peripheral suppliers and in the service sector expectedto provide a general boost to economic activity throughout the country. Get Full Details About This Report >> |
|
|||
|
About MarketResearch.com
|
||||