Hungary Economic Forecast

Hungary Economic Outlook

May 12, 2020

The economic scenario has further darkened at the outset of the second quarter, after the Covid-19 pandemic hit the economy in Q1. In March, industrial production contracted at the fastest rate in over a decade and retail sales growth eased markedly, reflecting the impact of lockdown measures imposed since 11 March. Moreover, both business and consumer sentiment fell to over decade lows in April. In response to the crisis, the government announced additional relief measures in April on top of those previously put forward, including support for prioritized sectors as well as interest-subsidized and guaranteed credit facilities for firms; the response package now totals around 13.6% of GDP. Meanwhile, some restrictions have been eased as of 4 May, barring in hotspot areas: Shops and restaurants are reopening, while some business travel is once again allowed.

Hungary Economic Growth

GDP is expected to fall this year as the Covid-19 pandemic deals a heavy blow to the economy. Domestic containment measures will depress household spending and fixed investment, while a feeble global trading environment is set to hammer the external sector. Fiscal stimulus and liquidity-boosting measures should offer some support, however. FocusEconomics analysts see GDP contracting 4.3% in 2020, which is down 1.3 percentage points from last month’s forecast. For 2021, the panel sees GDP growth at 4.7%.

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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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