The investment demand of the economic growth rate in Hungary is a starting point for estimating growth potential. Data for 1991-2001 as such suggest a sustainable growth rate of about 4.5 per cent. The realistically expectable rate will be much lower, as it is essential to modernize the infrastructure and alter the agricultural structure, while increasing environmental investment and overhauling education and the health service. Future contributions from foreign funds will be smaller than they were in the second half of the 1990s. The proportion of net savings by households will also ease. A fall in the calculable macro-level efficiency of investment will coincide with a reduction in the funds available for investment. These factors may be offset only partly by the resource-increasing and efficiency-improving effects of EU accession, so that the longer-term, sustainable growth rate can hardly exceed 3.0-3.5 per cent. Even that will be attainable only if the post-accession advantages provided by the EU are well utilized, if reforms are carried out in the great distribution systems and the growth is investment and export-led. Catching up with the EU average will take much longer than politicians had hoped, but the 3.0-3.5 per cent growth still counts as fast, although it will only be attained if unhampered by disputes over domestic political power.
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