Hungarian Parliament building

Hungary Economic Forecast

Hungary Economic Outlook

Year-on-year GDP contracted, and activity shrank for the third consecutive period in quarter-on-quarter terms in Q1. The annual fall was driven by a downturn in household spending amid elevated inflation and downbeat sentiment, as well as by contracting investment activity. Moving into the current quarter, momentum has likely remained subdued. Consumer confidence was deeply pessimistic in April-May, while both headline and core inflation dipped but remained above 20% in April, which has seemingly buffeted household spending. Moreover, in April-May, business sentiment averaged lower than in Q1, boding poorly for investment. Meanwhile, the government is intensifying its talks with the European Commission to unfreeze a third of the EUR 36 billion of EU funding designated for the country until 2027. That said, the remaining two-thirds should remain locked due to disagreements over reforms.

Hungary Inflation

Inflation decreased to 24.0% in April from March’s 25.2% amid softer price increases for food, energy and consumer durables. Therefore, it moved slightly closer to the Central Bank’s 2.0–4.0% target range. Inflation should ease further going ahead. That said, it will remain high by historical standards, fueled by strong wage growth and continued pass-through effects.

This chart displays Economic Growth (GDP, annual variation in %) for Hungary from 2013 to 2022.

Hungary Economic Data

2017 2018 2019 2020 2021
Population (million) 9.8 9.8 9.8 9.8 9.7
GDP (USD bn) 143 161 164 157 182
GDP per capita (USD) 14,613 16,415 16,781 16,096 18,719
GDP (EUR bn) 127 136 147 138 154
GDP per capita (EUR) 12,960 13,913 14,992 14,119 15,834
GDP (HUF bn) 39,275 43,387 47,674 48,425 55,255
Economic Growth (Nominal GDP, ann. var. %) 8.5 10.5 9.9 1.6 14.1
Economic Growth (GDP, ann. var. %) 4.3 5.4 4.9 -4.5 7.2
Domestic Demand (ann. var. %) 5.7 7.1 7.2 -2.6 6.3
Total Consumption (ann. var. %) 4.4 4.2 5.2 -1.0 3.7
Private Consumption (ann. var. %) 4.7 4.8 5.1 -1.3 4.8
Government Consumption (ann. var. %) 3.8 4.3 9.5 3.9 2.5
Fixed Investment (ann. var. %) 19.7 16.3 12.8 -7.1 6.5
Exports (G&S, ann. var. %) 6.5 5.0 5.4 -6.1 8.8
Imports (G&S, ann. var. %) 8.4 7.0 8.2 -3.9 7.7
Industrial Production (ann. var. %) 5.1 3.8 5.3 -6.6 9.6
Retail Sales (ann. var. %) 5.6 6.8 6.3 0.2 3.6
Disposable Income (ann. var. %) 6.3 5.4 4.9 -0.4 8.3
Wages (ann. var. %) 12.9 11.1 11.5 9.8 8.7
Unemployment (% of active population, eop) 3.7 3.5 3.2 4.1 3.7
Unemployment (% of active population, aop) 4.1 3.6 3.4 4.0 4.1
Fiscal Balance (% of GDP) -2.5 -2.1 -2.0 -7.5 -7.1
Public Debt (% of GDP) 72.1 69.1 65.3 79.3 76.6
Money (ann. var. of M2 %) 9.9 12.5 9.5 21.3 16.0
Inflation (CPI, ann. var. %, eop) 2.1 2.7 4.0 2.7 7.4
Inflation (CPI, ann. var. %, aop) 2.3 2.8 3.3 3.3 5.1
Inflation (HICP, ann. var. %, aop) 2.4 2.9 3.4 3.4 5.2
Inflation (Core, ann. var. %, aop) 1.9 2.0 3.1 3.7 3.9
Inflation (PPI, ann. var. %, aop) 3.3 5.5 2.1 4.2 13.6
Central Bank Base Rate (%, eop) 0.90 0.90 0.90 0.60 2.40
3-Month Interbank Rate (%, eop) 0.03 0.13 0.16 0.75 4.21
10-Year Bond Yield (%, eop) 2.02 3.01 2.01 2.08 4.51
Stock Market (ann. var. of BUX Index %) 23.0 -0.6 17.7 -8.6 20.5
Exchange Rate (HUF per USD, eop) 258 281 295 296 324
Exchange Rate (HUF per USD, aop) 274.31 270.32 290.69 307.94 303.34
Exchange Rate (HUF per EUR, eop) 310 321 331 363 369
Exchange Rate (HUF per EUR, aop) 309.29 318.91 325.38 351.06 358.61
Current Account Balance (EUR bn) 2.5 0.2 -1.1 -1.6 -6.3
Current Account Balance (% of GDP) 2.0 0.2 -0.8 -1.1 -4.1
Merchandise Trade Balance (EUR bn) 1.7 -2.3 -3.7 -1.3 -4.4
Merchandise Exports (EUR bn) 85.3 88.5 92.5 88.7 100.9
Merchandise Imports (EUR bn) 83.6 90.8 96.2 90.0 105.3
Merchandise Exports (ann. var. %) 8.5 3.8 4.5 -4.2 13.8
Merchandise Imports (ann. var. %) 12.0 8.7 5.9 -6.5 17.0
Foreign Direct Investment (EUR bn) 10.7 11.3 11.6 11.0 12.0
International Reserves (EUR bn) 23.4 27.4 28.4 33.8 38.4
International Reserves (months of imports) 3.4 3.6 3.5 4.5 4.4
External Debt (EUR bn) 106 108 107 112 131
External Debt (% of GDP) 83.1 79.2 73.1 81.0 84.7

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