Hungary: 2018 Article IV Consultation-Press Release and Staff Report

IMF Staff Country Reports, August 3, 2018

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Headline inflation has started to pick up, mainly owing to higher energy prices.
Core inflation has been running sideways over the past six months, despite emerging capacity constraints.
Unemployment remains on a decreasing trend.
Labor shortages are intensifying despite the improvement in participation rates.
The 2017 general government fiscal deficit narrowed to 2 percent of GDP, compared with the budgeted 2.4 percent.
The 2017 fiscal outturn was mostly driven by strong GDP growth and reduced interest payments.
IMF staff projects the 2018 overall fiscal deficit at about 2.4 percent of GDP, in line with the budget’s target.

2017 general government fiscal deficit: 2 percent of GDP (actual).
2017 budgeted general government fiscal deficit: 2.4 percent of GDP (budgeted).
2018 projected overall fiscal deficit (IMF staff): about 2.4 percent of GDP.
Drivers of the improved 2017 fiscal balance: strong GDP growth and reduced interest payments.

Headline inflation: rising, driven mainly by higher energy prices.
Core inflation: stable ("running sideways") over the past six months despite signs of capacity constraints.
Labor market: decreasing unemployment, rising participation rates, and intensifying labor shortages.

Hungary: 2018 Article IV Consultation-Press Release and Staff Report