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

Since mid-2021, the Hungarian economy has undergone a period of overheating that was intimately bound up with the extended campaign leading up to the parliamentary elections on 3 April. The excessive deployment of ‘election goodies’ by the government has resulted in large current account and fiscal deficits, rising inflation and a weak forint. Now that the election has been won, Prime Minister Orbán will have to deal with the unpopular task of economic consolidation. A relatively soft landing would require the country to gain access to the EU transfers from the Recovery and Resilience Facility, but the ongoing conflict with the EU over the ‘rule of law’ (primarily corruption related) renders this doubtful. Economic growth is expected to slow this year, to the range of 2-3%.