Hungary Economic Forecast

Hungary Economic Outlook

November 3, 2020

The economy seemingly emerged from recession in Q3 after the severe blow dealt by lockdown measures at home and abroad in Q2. Both industrial production and merchandise exports contracted at a notably softer pace in July-August compared to Q2, which, together with higher business sentiment, points to improving private sector activity. Moreover, stronger retail sales and less downbeat consumer sentiment in Q3 hint at recovering household spending. Turning to Q4, available indicators paint a mixed picture of the economy: Although business sentiment rose further in October, consumers turned more pessimistic in the same month, likely due to the sustained rise in new Covid-19 cases. Meanwhile, in late October, the Council of the European Union approved a EUR 504 million loan for Hungary as part of the EU's SURE program to protect jobs and sustain incomes amid the pandemic.

Hungary Economic Growth

Next year, GDP is seen recovering from the pandemic’s fallout as private spending rebounds, external demand returns on the back of a reopening of the global economy and inflows of EU funding provide further support. That said, the unpredictable evolution of the pandemic poses a downside risk to the outlook. FocusEconomics analysts see GDP growing 4.7% in 2021, which is down 0.1 percentage points from last month’s forecast, and 3.8% in 2022.

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Hungary Facts

Value Change Date
Bond Yield2.080.0 %Dec 31
Exchange Rate295.1-0.68 %Jan 01

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