Hungary
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| Population, 1000 persons | 9710 | 9644 | 9592 | . | . | . |
| GDP, real change in % | 7.1 | 4.6 | -0.9 | 2.0 | 2.5 | 2.9 |
| GDP per capita (EUR at PPP) | 24370 | 26930 | 28720 | . | . | . |
| Gross industrial production, real change in % | 9.6 | 6.1 | -5.6 | . | . | . |
| Unemployment rate - LFS, in %, average | 4.1 | 3.6 | 4.1 | 4.4 | 4.0 | 3.7 |
| Average gross monthly wages, EUR | 1188 | 1278 | 1496 | . | . | . |
| Consumer prices, % p.a. | 5.2 | 15.3 | 17.0 | 4.5 | 3.8 | 3.5 |
| Fiscal balance in % of GDP | -7.2 | -6.2 | -6.7 | -5.5 | -4.0 | -3.5 |
| Public debt in % of GDP | 76.7 | 74.1 | 73.5 | . | . | . |
| Current account in % of GDP | -4.3 | -8.4 | 0.2 | 0.2 | 0.3 | 0.4 |
| FDI inflow, EUR m | 8776 | 14064 | 3482 | . | . | . |
| Gross external debt in % of GDP | 87.0 | 91.9 | 85.8 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.
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Monthly Report No. 7-8/2024
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2024
45 pages including 5 Tables and 12 Figures
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Executive summary
Olga Pindyuk
in: The Crisis is Over, but its Scarring Effects are Hindering Recovery
wiiw Forecast Report No. Spring 2024, April 2024 , pp. I-VII
Details
GDP increased by 1.1% in the first quarter of the year. Services performed at above the average growth rate, while industry has witnessed considerable shrinkage for over a year now, explained mainly by the weak performance of its largest sector, the automotive industry. Growth in Q1 2024 was driven by a moderate recovery in private consumption and positive net exports. Gross fixed investments booked a strong decline. Looking ahead, private consumption is expected to continue as the main engine of growth this year. Wages increased by 14.2% in Q1, while inflation amounted to 3.6% in the same period, meaning a substantial increase in real wages. Nevertheless, consumer price inflation is expected to rise slightly over the year. More importantly, the inflation shock of 2023 has obviously continued to affect consumer behaviour, as demonstrated by the modest (2.4%) increase in retail sales in real terms in the first trimester of the year (year on year). Part of the increase in household income has been channelled into various forms of savings – the combined outcome of consumer cautiousness and enticing yields on government securities. A crucial issue is how the expected start of an unavoidable fiscal consolidation after the European Parliament and municipal elections in June will impact private consumption. Even moderate fiscal measures will slow the pace of economic recovery. Lasting conflicts with the EU are not helpful in this respect, either. This year GDP may grow by around 2%, a minimal improvement on our previous forecast. Then 2025 and 2026 could see a somewhat better growth performance. The European Parliament elections in June brought a political earthquake in the shape of a new opposition party. Set up by a disaffected former Orbán loyalist, TISZA – with its trenchant anti-corruption programme and its commitment to restore the rule of law – managed to collect close to a third of the votes, just a few weeks after being established. Stay tuned for further political developments.