map Hungary
While GDP in Q1 2021 declined by 2.1%, the data suggest a remarkable recovery in industry and agriculture, but a weaker performance in services and construction. Household consumption was about 5% down on a year ago, but this was partially balanced by a double-digit increase in public consumption. Gross fixed capital formation reached the level of Q1 2020. The net contribution of external trade to GDP turned positive. Inflation is back: in May, the CPI climbed to 5.1% on an annual basis. The central bank announced the start of a tightening cycle and lifted the policy rate from 0.6% to 0.9%.

The growth forecast for 2021 has been revised upwards, to 4.9% (from 3.9%). The main driver of growth will be investment. Household consumption will be boosted by pre-election fiscal ‘handouts’, but will simultaneously be curbed by the end of the moratorium on loan repayments, prevailing uncertainties and loss of income across broad sections of society. A justified fiscal expansion in the wake of the pandemic may tip over to become extreme, in order to secure an election victory for Prime Minister Orbán in April 2022. Economic growth will be slowed by fiscal consolidation in 2022 and 2023.
Main Economic Indicators201820192020202120222023
Population, 1000 persons977697719750...
GDP, real change in %5.44.6-
GDP per capita (EUR at PPP)215802281022100...
Gross industrial production, real change in %3.55.6-6.0...
Unemployment rate - LFS, in %, average3.
Average gross monthly wages, EUR103511311149...
Consumer prices, % p.a.
Fiscal balance in % of GDP-2.1-2.1-8.1-6.5-4.5-3.5
Public debt in % of GDP69.165.580.4...
Current account in % of GDP0.2-0.7-
FDI inflow, EUR m667126982873...
Gross external debt in % of GDP79.272.480.5...

Basic data are continuously updated.

* Forecasts are changed beginning of April, July and November.
See Press Conferences.


Monthly Report No. 9/2021

Vasily Astrov, Rumen Dobrinsky, Olga Pindyuk and Leon Podkaminer
wiiw Monthly Report No. 9, September 2021
49 pages including 28 Figures

Details and Buy


HUNGARY: Recovery with strong downside risks

Sandor Richter
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 73-76
Details and Buy