Despite better-than-expected first-quarter GDP data, growth in the Hungarian economy may be subdued this year, while inflation is likely to remain within the target range, according to the MBH Analysis Center’s Macroeconomic Outlook released on Wednesday.
The analysis, reviewed by MTI, states that strong forint and easing inflation may provide room for monetary easing, while the budget deficit may only decline in the coming years.
First-quarter GDP data came in better than expected, painting a positive short-term picture of the Hungarian economy’s performance. At the same time, growth may have been partly supported by temporary factors – such as budgetary resources – while the trend in household consumption remains fundamentally dependent on real incomes and confidence.
Analysts continue to view moderate GDP growth of 1.6% in 2026 as realistic, driven primarily by consumption. In 2027, however, growth of around 3 percent with a more balanced structure could materialize if, alongside a pickup in external demand, EU funds are increasingly injected into the economy, the summary quoted Zoltán Árokszállási, director of the MBH Analysis Center.
In the labor market, population decline is becoming an increasingly significant constraint on employment growth. Companies are facing growing cost pressures, which could dampen their willingness to hire: experts anticipate a significant rise in the unemployment rate, with an average of around 4.6% expected in 2026. Wage growth is estimated at 9%, with a slowdown expected next year.
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