The Hungarian economy recorded a growth of only 1.4 percent year-on-year in the second quarter of 2007, the Central Statistical Office (KSH) announced on Tuesday.
This is the lowest growth rate since 1996 and far below analysts’ expectations, who predicted that the growth of gross domestic product (GDP) for the entire year would exceed two percent.
Hungary is in the midst of a challenging fiscal adjustment as the government seeks to reduce a large budget deficit, which was 9.2 percent of GDP in 2006 and the largest in the European Union. The growth of Hungary’s GDP was around 4 percent in the years prior to the introduction of the government’s strict measures, which also spurred inflation. KSH reported that consumer prices rose by 8.4 percent year-on-year in July. However, the inflation rate is now showing a downward trend. (Hina)
