In the major part of the world economy recession was over in the third quarter of 2009 in technical terms. In Hungary recession is expected to come to an end only in the fourth quarter. Recovery could be quicker than expected, although setbacks cannot be excluded either, and the former level of GDP could be reached globally only in 2011-2012. In 2010 modest growth is expected in the EU and stagnation in Hungary. Confidence in the Hungarian economy that had been destroyed formerly has been on the rise. Economic trends are basically in line with the projections of GKI prepared in September 2009.
In 2009 the contraction of GDP is expected to total 2.5 per cent in the US, 4 per cent in the EU and 6.5 per cent in Hungary. In 2009 Hungary shall not have to rely on net external financing sources since it will use the loans received earlier for the increase of international reserves or the repayment of former borrowings. Hungarian economic policy fended off successfully the major threats of the global turmoil: the exchange rate and the liquidity crisis. It undertook a significant correction in order to restore external and internal equilibria mainly by sharp cuts in general government expenditures, to a lesser extent by introducing systemic changes and restructurings in pensions, social services and the tax system. Undertakings and households reduced their demand for credits, their consumption and investments. Read more of the whole GKI-forecast here.