Hungary Economic Forecast

Hungary Economic Outlook

November 26, 2019

A preliminary estimate revealed that growth picked up pace in the third quarter, after slowing to a one-year low in the second quarter. Industrial production rose at a faster rate in Q3 than in Q2, while merchandise exports accelerated markedly in the same period, suggesting that the manufacturing sector resisted the weak European backdrop. Moreover, private consumption likely gained traction given that retail sales growth quickened in Q3 amid improved consumer sentiment, which surged to a near 17-year high in September, and a tight labor market. Indicators for October, however, paint a less rosy picture for the fourth quarter: Economic sentiment sunk to a three-year low in October, underpinned by a plunge in consumer sentiment, which more than offset an improvement in business confidence in the same month. Meanwhile, in other news, the Ministry of Finance proposed new tax cuts and measures to simplify the tax system for 2020, which should stimulate growth and competitiveness in the short-term.

Hungary Economic Growth

Growth is seen easing next year, as fixed investment loses strength on reduced absorption of EU funds and slower job creation weighs on private consumption. Meanwhile, subdued growth in key trading partners, trade war uncertainties and a hard Brexit pose the main downside risks to the outlook. FocusEconomics analysts see growth at 3.1% in 2020, which is up 0.1 percentage points from last month’s forecast, and 2.7% in 2021.

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Hungary Facts

Bond Yield1.970.0 %Nov 21
Exchange Rate302.5-0.68 %Nov 21
Stock Market43,6540.04 %Nov 21

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