The economic outlook has improved in Hungary on the back of personal income tax cuts and reductions in social security contributions, the report said.

Growth last year was curbed by a dramatic fall in investment and, as in most other EU new member states, public investments have dwindled since the start of 2016 due to the slow start of the new European Union 2014-20 funding cycle, the bank said, adding that with corporate credit still contracting, private investment growth was also downbeat.

In contrast, household consumption was up 5%, driven by real wage growth of 6% and the unemployment rate falling to just 4.2% in January 2017, the report said.

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