Bloomberg News

Hungary Growth Prospects Dim on Europe-Wide Slowdown, Simor Says

September 01, 2011

Sept. 1 (Bloomberg) -- Western Europe’s slowing economy will hurt Hungary’s growth prospects for “the next couple of years,” central bank President Andras Simor said.

“Most recently, as we see that the European economies are not going to grow as strongly as what was hoped for a few months ago, unfortunately it has an immediate impact on Hungary’s growth prospects for the next couple of years,” Simor said in an interview in Alpbach, Austria today.

Hungary’s economy stalled in the second quarter as industrial output petered out amid concern the debt crises in Europe and the U.S. and slowing growth in China will derail the global recovery. Hungary has relied on Germany, its biggest export market, to speed its recovery from a recession.

The government now expects growth to be close to 2 percent this year, compared with a previous estimate of 3.1 percent. The central bank, which in June forecast growth 2.6 percent growth for this year and 2.7 percent for 2012, will also have to adjust its estimates, Simor said.

“The next forecast, which will come out in September, will probably show poorer results for 2011, and probably also for 2012, as a direct consequence, among other things, of what is happening in Europe and particularly in the euro zone,” he said.

--With assistance from Zoe Schneeweiss in Vienna. Editor: Balazs Penz, Andrew Langley

To contact the reporters on this story: Peter Laca in Prague at placa@bloomberg.net; Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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