Hungary
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
| Population, 1000 persons | 9605 | 9592 | . | . | . | . |
| GDP, real change in % | 4.3 | -0.9 | 0.5 | 2.2 | 2.5 | 2.8 |
| GDP per capita (EUR at PPP) | 27600 | 29250 | . | . | . | . |
| Gross industrial production, real change in % | 6.1 | -5.5 | . | . | . | . |
| Unemployment rate - LFS, in %, average | 3.6 | 4.1 | 4.6 | 4.5 | 4.2 | 4.2 |
| Average gross monthly wages, EUR | 1278 | 1496 | . | . | . | . |
| Consumer prices, % p.a. | 15.3 | 17.0 | 3.7 | 4.0 | 3.5 | 3.3 |
| Fiscal balance in % of GDP | -6.2 | -6.7 | -4.9 | -4.5 | -4.0 | -3.5 |
| Public debt in % of GDP | 73.8 | 73.4 | . | . | . | . |
| Current account in % of GDP | -8.5 | 0.7 | 2.1 | 2.3 | 2.5 | 2.3 |
| FDI inflow, EUR m | 14047 | 3253 | . | . | . | . |
| Gross external debt in % of GDP | 91.8 | 85.9 | . | . | . | . |
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. 1/2025
Vasily Astrov, Alexandra Bykova, Selena Duraković, Meryem Gökten, Richard Grieveson, Maciej J. Grodzicki, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Dzmitry Kruk, Sebastian Leitner, Isilda Mara, Emilia Penkova-Pearson, Olga Pindyuk, Sandor Richter, Marko Sošić, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 1, January 2025
50 pages including 6 Tables and 13 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
With an estimated GDP growth rate of 0.5%, Hungary’s 2024 economic performance remained well below the government’s planned 4% expansion. Only the services sector showed an improvement over 2023. Investment suffered a heavy fall. Inflation declined to a tolerable level, though the budget deficit may have remained at about 5% of GDP. While PM Orbán promises a ‘fantastically good’ 2025 for the economy, the budget was planned based on 3.4% growth – and even that seems overambitious. The prerequisites for the high-pressure economy pushed by Mr Nagy, the prime minister’s economic ‘right-hand man’, are lacking. The considerable cost of financing the budget deficit severely constrains government intervention (the interest on public debt in 2024 is estimated to have been 4.8% of GDP). Reduced transfers from the EU also present an obstacle. Uncertainty and the fear of renewed inflation are holding back the expansion of household consumption, envisaged as one of the main drivers of growth. From a very low basis, investment is expected to take off gradually, thanks largely to the completion of a few big FDI projects in the automotive industry. Most domestic enterprises, however, will probably remain in a semi-dormant state, paralysed by inadequate domestic and foreign demand and by unforeseeable changes in the regulatory environment. The elections scheduled for early 2026 and the robust rise of the new opposition party TISZA, headed by Péter Magyar, may induce the government to indulge in populist pre-election spending. Should a runaway budget deficit be permitted and substantial preferential credit lines opened to foster consumption and output growth, the effect will be a surge in inflation and further weakening of the forint. Our main scenario for 2025 is an ‘in-between’ one: moderate GDP growth of 2.2%, only a slight improvement in the fiscal stance, close to 4% inflation and a highly volatile exchange rate, with continued devaluation. 2026 would see a slight acceleration of growth and a modest improvement in macroeconomic equilibrium.