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"Budgetary performance at the beginning of 2006 appears to be in line with official expectations. Yet considerable fiscal stabilization is expected after the elections," the think tank wrote in the report.
Kopint-Datorg analysts also noted that exports, one of the main driving forces behind economic growth, are set to grow 14.0% during 2006, up from a 10.6% increase in 2005.
"On the eve of parliamentary elections, manufacturing, construction and exports seem to remain robust after last year’s strong performance," the report reads.
The research firm modified its forecast of import growth upwards to 13.5% for 2006, a huge jump from the 5.8% seen in 2005.
Although the deceleration of inflation is expected to continue, the trend is unfortunately heavily influenced by a ballooning fiscal deficit, said Kopint-Datorg. Thus the firm modified its 2006 CPI outlook of 1.9% to 2.1%, which compares to 3.6% in 2005.
"Despite the weakening of the forint (to above 267 per euro when closing the report) as a result of international trends and domestic fiscal deficit, CPI still seems to be able to remain close to an annual 2%," the firm said.
Kopint-Datorg also noted that despite increases seen in a wide range of indicators, unemployment remains an unresolved question, with 2006 figures expected to come to 7.5%, up from 7.2% in 2005.
