European Commission Expects Pickup in Hungary GDP growth

The European Commission (EC) expects Hungary's GDP growth to accelerate to 1.8% in 2026 and 2.1% in 2027 on domestic demand and a recovery in exports, a spring forecast released on Thursday shows.

GDP growth is set to pick up from 0.5% in 2025, "underpinned by domestic demand and exports, as well as improved confidence", the EC said. While consumption is expected to be a "key growth driver" in 2026, supported by strong wage growth and fiscal measures, it is set to moderate in 2027 as wage growth slows.

Investment is seen recovering gradually and increasing 3.9% in 2027, driven by public investment, a pick-up in construction, supported by elevated housing demand and improving business sentiment.

Export growth will be boosted by the launch of automotive industry capacity and the expected recovery in external demand, the EC said.

Hungary's current account balance is forecast to shift from a surplus in 2025 to a deficit of 0.2% of GDP in 2026 as high energy prices cause terms of trade to deteriorate.

Risks to the outlook include continued weakness in investment and exports linked to disruptions in global supply chains and cost competitiveness losses. On the upside, restoring full access to EU funds would improve the macroeconomic and fiscal outlook.

Inflationary pressure from strong domestic demand and high wage growth are largely offset by a 7% currency appreciation in 2026, the EC said. It sees CPI reaching 3.1% in 2027 as energy prices fall and wage pressure eases.

The EC expects Hungary's general government deficit, relative to GDP, to widen to 6.2% in 2026 and remain high at 5.8% in 2027. Interest expenditures, as a share of GDP, are projected to remain broadly stable as yields on government bonds have fallen.

Hungary's state debt to GDP ratio is seen rising to 75.1% in 2026 from 74.6% in 2025.