Analysts reacted with some disappointment to the first estimate of second-quarter GDP data, but welcomed the fact that, after a prolonged period of stagnation, the economy appears to have entered a sustained growth trajectory.
According to the first estimate released Thursday by the Central Statistical Office (KSH), Hungary’s gross domestic product (GDP) grew by 1.7% in the second quarter of 2026 based on raw data, and by 1.6% according to seasonally and calendar-adjusted and balanced data, compared to the same period of the previous year. Compared to the previous quarter, economic output expanded by 0.4% based on seasonally and calendar-adjusted and balanced data.
Péter Virovácz, chief economist at ING Bank, explained in his commentary on the data that the latest GDP figures were somewhat disappointing, as the 0.4% quarterly growth fell significantly short of market consensus. The year-over-year growth rate is the same as that seen in the first quarter. The Hungarian economy has been expanding for the fifth consecutive quarter, which also means that it has finally emerged from a prolonged period of stagnation and returned to a growth trajectory. There was no change from the first quarter in that, alongside services, manufacturing was the other key driver of growth in the second quarter as well. In light of the first-half performance, ING Bank is revising its GDP forecast for this year from the previous 1.5% to 1.9%, based on the expectation that improving confidence indices will accelerate consumption growth, corporate investment will pick up and government investment will also surge.
János Nagy, a macroeconomic analyst at Erste Bank, also pointed out that the second quarter of this year marked the fifth consecutive three-month period of economic growth, following nearly three years of erratic stagnation. He added that, looking ahead, short-term downside risks to growth could stem from the protracted conflict in the Middle East, a drought that promises to be severe and potential cuts to government spending. Erste is maintaining its 1.7% GDP growth forecast for this year for the time being, with upside risks.
Dávid Németh, a senior analyst at K&H, noted while assessing the data that he had expected a slight slowdown on a quarterly basis, but the annual figures are in line with expectations. In the second quarter, the industrial and service sectors drove GDP growth, while agriculture held back growth. The latest foreign trade data, released alongside the GDP figures, show a significant trade surplus, so it is also possible that net exports in the second quarter did not drag down growth. Based on the current outlook, Dávid Németh believes that annual GDP growth could reach 1.7% overall in 2026, with an acceleration possible next year.
Dániel Molnár, chief analyst at the GFÜ Economic Analysis Center, also noted that second-quarter GDP growth fell short of expectations. Regarding industry’s contribution to growth, the analyst emphasized the low base effect and the role of certain major investments are beginning to bear fruit, while external demand remains rather weak. In agriculture, the severe drought caused a decline even compared to last year’s weaker base, and there is a good chance that the sector will fall short of its 2022 low this year due to the drought. In the growth of services, consumption – which is picking up as incomes improve – and demand in the housing market may also have played a role. As he added, from the expenditure side, the lower-than-expected quarterly expansion suggests that a turnaround in investment is still a long way off, while net exports continue to hold back growth momentum. Looking ahead, Dániel Molnár believes that, given the weaker quarterly growth in the second half of last year, growth momentum may accelerate by the end of the year, while economic expansion for the year as a whole may remain below 2%. Consumption is likely to remain the main driver of growth for the remainder of the year, while investments are expected to support the recovery only starting at the end of the year, provided that the outlook improves and the utilization of EU funds begins.
Gábor Regős, chief economist at Gránit Asset Management, believes that several factors may have contributed to the worse-than-expected GDP data, including the fact that the monthly figures for June were not as strong as those recorded in the first two months of the quarter. He also noted that in the first quarter, the previous government pursued an extremely expansionary fiscal policy, compared to which the second quarter was certainly tighter. It is possible that this effect was also stronger than expected. Tourism also tended to slow growth, with the war in Iran likely serving as the main drag. The latest data has slightly lowered the forecast for this year’s GDP by an expert at Gránit Asset Management, but it remains within the 1.5-2.0% range.
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