WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

Hungary has slipped into recession, with private consumption and investment contracting in H1 2023. Net exports mitigated the decline. The economy may soon see a slight recovery, but the annual growth rate will remain at below zero. Only a modest recovery is expected in 2024 and 2025. Growth would receive a fillip from EU transfers and a strong recovery of the main export markets, but neither of those things is currently on the horizon. Fiscal consolidation and continued high interest rates may slow the pace of recovery. Inflation will likely fall to below 10% later in 2023 and slowly sink further over the next two years.