Hungary Economic Forecast

Hungary Economic Outlook

March 5, 2019

Growth was buoyant in Q4 2018, boosted by soaring domestic demand. Fixed investment continued to surge, fueled by inflows from EU funds and sturdy construction production, while robust wage growth and an extremely tight labor market powered solid consumer spending. Heading into Q1, low unemployment in January and solid albeit softening optimism among businesses in the first two months of the year point to robust growth, even if it is likely to moderate somewhat. In a testament to the country’s rosy economic situation, in February both Standard & Poor’s (S&P) and Fitch Ratings upgraded the country’s rating to BBB from BBB-, with a stable outlook. S&P highlighted Hungary’s strong growth prospects, amid wage gains and the expansion of export capacity; Fitch Ratings cited the country’s rapid external deleveraging, a sizable current account surplus and a declining debt-to-GDP ratio.

Hungary Economic Growth

The economy should perform robustly this year, although growth is poised to soften following a superb 2018. Particularly, a slowdown in EU fund inflows will translate into a less impressive expansion in fixed investment, while higher inflation and fewer job gains will drag on consumer spending. Risks to the outlook stem mainly from the economic performance of the EU. FocusEconomics panelists see the economy expanding 3.4% in 2019, unchanged from last month’s forecast, and 2.6% in 2020.

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Hungary Facts

ValueChangeDate
Bond Yield3.280.0 %Mar 11
Exchange Rate280.7-0.68 %Mar 11
Stock Market40,8200.04 %Mar 11

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