macroeconomic forecast

Századvég Konjunktúrakutató estimates that the Hungarian economy will grow by 1.7% in 2024, 3.8% in 2025 and 3.2% in 2026. However, the conditions for growth are fragile, with both downside and upside risks in the Hungarian economy, so caution is warranted when making forecasts. In the global context, external disinflationary developments are working towards lower domestic inflation, but the geopolitical situation may continue to be a key factor. In terms of internal factors, the predominant factors for the Hungarian economy this year are the cautiousness of the household sector, low investment activity and the subdued performance of domestic exports in light of the weakening German manufacturing sector. However, in the period ahead, exports could pick up again as international demand—especially German demand—strengthens, which, combined with improving investment activity, could lead to dynamic GDP growth in 2025 and 2026.

Századvég Konjunktúrakutató estimates that the Hungarian economy will grow by 2.7% in 2024, 3.9% in 2025 and 2.9% in 2026. However, growth conditions are fragile, so it may be worth taking a cautious view of economic expectations for the coming years. Looking at global trends, reducing prices of energy carriers and external disinflationary developments point to a further moderation in Hungarian inflation. Regarding Hungarian exports, the output gap in the euro area could close at the end of 2025, which could be supportive for Hungarian exports, but deteriorating growth prospects in the euro area could also have an impact in Hungary.

In 2023, the volume of Hungarian gross domestic product (GDP) fell slightly by 0.7%, while growth is likely to remain subdued in the following years. We expect Hungarian economic output to grow by 2.7% in 2024 and 3.4% in 2025. This year and next will be marked by a slow recovery process.

The Hungarian economy grew by 4.6% in 2022. Data from the first three quarters of 2023 suggest no economic growth: Századvég Konjunktúrakutató forecasts that the Hungarian economy may shrink by 0.7% in 2023. We expect growth to be 2.7% and 3.1% in the next two years, which implies an overall slow pick-up after this year’s economic downturn.

In 2022, the Hungarian economy grew by 4.6%. Data from the first two quarters of this year suggest no economic growth: Századvég Konjunktúrakutató forecasts that the Hungarian economy may shrink by 0.3% in 2023. 2024 and 2025 are expected to produce modest growth rates, 2.5% and 2.8% respectively.

The performance of the Hungarian economy grew by 4.6 percent in 2022, while we estimate that it may expand by 0.6 percent in 2023 and 3.4 percent in 2024. Since our previous forecast in December 2022, we have revised our growth outlook downwards. Downside risks include declining retail sales, uncertainties over EU funds and a high interest rate environment.