Investments will rise again as soon as EU funds open up next year and employment will continue to rise, they said. Pénzügykutató expects investments to drop 10% in 2016 and rise from a low base next year. Shrinking investments will be partially offset by rising consumption as real incomes are seen to rise by 7.7% this year and 3.5% next year.

Pénzügykutató calculated the real wage increases assuming annual average inflation of 0.3% this year and 2.1% next year.

The budget deficit will be 1.8% in 2016 and grow to 2.6% in 2017, still well within the 3% Maastricht criterion, the think-tank said. Public debt as a percentage of GDP is forecast to drop to 74% by the end of this year and to 73.1% next year from 74.7% at the end of 2015.

The foreign trade surplus is expected to rise to a new high of 10 billion euros this year from 8.6 billion euros in 2015 and to drop only slightly in 2017.

The current account surplus would reach a new peak at 6.5 billion euros in 2016 and drop to 6.1 billion euros in 2017 after reaching 3.7 billion euros last year. The large external surpluses despite decreasing EU inflows reflect low private investments. Non-financial businesses have remained net savers, the researchers warned.

Republished with permission of Hungary Matters, MTI’s daily newsletter.