Hungarian growth to speed up to around 3.5 precent in 2009 from 1.5-2.0 precent this year - OECD

                                                                                         

Hungary's economic growth could be around 1.5-2.0% in 2008 and speed up to 3.25-3.5% in 2009, the Organisation for Economic Growth and Development (OECD) projected on Thursday, stressing that the estimates are based on a database still in an embryonic stage.
At a joint press conference of the OECD and Hungary's Finance Ministry, the organisation said Hungary's potential GDP growth is above 3%. This rate could be increased by the reforms strongly urged by the OECD, while the actual economic growth hinges on the applied economic policy, OECD officials said.

Deputy Secretary-General Aart de Geus said today's report held three key messages for Hungary.

1) Hungary needs to continuously reduce the budget deficit and push it below 3% of GDP by 2010. “This (result) should not be regarded as the government's glory, rather as the common interest of the entire society," de Geus underlined.

2) Hungary should not falter in its reform drive, but “finish what it started". The Deputy Secretary-General tried to make it clear that putting reform measures in place is indeed painful (lower energy subsidies or headcount reductions in public administration). He stressed, however, that the reduction of the size of public administration comes with larger employment in the private sector, and will eventually result in higher living standards.

3) Continuous monitoring of the reforms is crucial so that policy makers can react flexibly to new challenges and bring forward-looking decisions accordingly. Aart de Geus underlined the importance of having wide-scale social and professional debates

About the author:
Rony Grynholc is the CEO of ITP group - a private investment company and president chamber of Commerce Israel-Hungary.

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