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Following the election-related overheated growth of 2022, the economy experienced a hard landing in 2023 and entered a period of recession. The falling cost of imported energy, shrinking consumption and investment, and monetary tightening all led to a dramatic drop in inflation in the course of the year: from 25.7% in January to 5.5% in December. The recession brought about an improvement in the current account deficit – from over 8% of GDP in 2022 to close to zero last year. However, the economy is far from being in good shape. The general government deficit was as high last year as it was in 2022, at around 6% of GDP. Economic policymakers face a dilemma. On the one hand, any premature relaxation of monetary policy and increased public spending would boost growth, but would also risk an upsurge in inflation and a runaway fiscal deficit. On the other hand, a recovery that is more self-supporting and less policy induced would prevent the re-emergence of potentially dangerous macroeconomic imbalances, but would also mean slower growth for longer. Both approaches have influential supporters in the government, and so the outcome of the deliberations cannot yet be predicted. Our forecast reckons on a moderately interventionist economic policy and a modest recovery based on a gradual upturn in private consumption, marginal investment growth and close to neutral net exports. There will be no surge in inflation, which will most probably remain in the region of 5% throughout the year. The fiscal position, backed by a partial resumption of EU transfers, is expected to improve, but it will continue to remain a concern.
Main Economic Indicators202120222023202420252026
Population, 1000 persons97109643....
GDP, real change in %7.14.6-
GDP per capita (EUR at PPP)2437026980....
Gross industrial production, real change in %9.66.1-4.1...
Unemployment rate - LFS, in %, average4.
Average gross monthly wages, EUR11881278....
Consumer prices, % p.a.5.215.317.
Fiscal balance in % of GDP-7.2-6.2-6.0-4.5-3.3-4.0
Public debt in % of GDP76.773.9....
Current account in % of GDP-4.2-8.20.0-2.5-2.9-3.2
FDI inflow, EUR m758011882....
Gross external debt in % of GDP84.989.0....

Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
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Monthly Report No. 1/2024

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, Marko Sošić, Bernd Christoph Ströhm, Maryna Tverdostup and Adam Żurawski
wiiw Monthly Report No. 1, January 2024
50 pages including 5 Tables and 18 Figures



HUNGARY: A bumpy road to recovery from the recession

Sandor Richter
in: Beneath the Veneer of Calm
wiiw Forecast Report No. Autumn 2023, October 2023 , pp. 76-79
Details and Buy