The View 7th edition

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all-time high levels in recent months. On the other hand, all macroeconomic forecasts point to decelerating growth across the globe and Europe in particular. With that said, recent forecasts have been revised upwards and a severe slowdown is not anticipated: GDP growth for Hungary is expected to slow to 3.4% in 2019 – still comfortably above the Eurozone average of 1.6%. CONSTRUCTION AND RETAIL & TOURISM PULLING THE ECONOMY The share of the construction sector in the economy has markedly increased in the last two years – while it was a drag on growth in 2016, it has become the second biggest contributor to GDP growth by the end of 2018 following two years of double-digit expansion. Fueled by available EU funding, the increase in infrastructure-driven civil engineering (+40%) was still way ahead of the construction of buildings (+18%), despite the visible development boom in the real estate industry. Looking at real estate construction figures, 28% more dwellings were built across the country in Q1-Q3 2018 compared to the same period of the previous year. While the increase in occupancy permits was stunning, the number of building permits ceased to increase – in fact, it fell back by 25% in Budapest. The service sector remined driven by wholesale and retail sales growth; the overall retail trade volume finally surpassed the pre-crisis peak by 2018, following 30% cumulative growth since 2013, the bottom of the cycle. Purchasing power continued to grow in Budapest and across the country and