What Awaits the Hungarian Economy in 2026 and 2027?

According to the latest economic forecast from the Equilibrium Institute, a moderate recovery may follow several years of weak performance, but growth prospects remain subject to significant external and internal risks. Their analysis reviews the expected trends in GDP, inflation, exchange rates, the labor market, consumption and investment.

The Institute's spring 2026 forecast predicts that the Hungarian economy could grow by 1.5% in 2026 and 2.6% in 2027. The main driver of growth will remain household consumption, supported by rising real incomes and fiscal stimulus measures. In contrast, the contribution of net exports is expected to be modest, partly due to the weakness of the European economy and uncertainties in international trade.

Inflation is projected to slow, but the issue is far from settled. The Equilibrium Institute forecasts an average annual inflation rate of 3.9% for 2026 and 3.4% for 2027. Disinflation could be aided by subdued demand, high real interest rates and a relatively strong forint (HUF); however, energy price trends and geopolitical tensions continue to pose upside risks.

The monetary environment may remain tight in both the short and medium term. According to the analysis, high real interest rates and an overvalued EUR-HUF exchange rate continue to hold back economic performance. The average exchange rate could be around HUF 388 / EUR in 2026 and HUF 400 / EUR in 2027. This could simultaneously provide some support in curbing inflation and act as a constraint on growth.

No dramatic turnaround is expected in the labor market in the coming period. According to the Equilibrium Institute, employment in the private sector may decline by 0.2% in 2026, then increase by 0.4% in 2027. The unemployment rate may rise to 4.5% in 2026, then moderate to 4.2% by 2027. Real wages may continue to rise, but at a slower pace than in the previous period: median real wage growth could be 3.4% in 2026 and 3% in 2027.

Household consumption may remain on a positive trajectory, but growth could be modest. According to the forecast, household consumption could grow by 2.5% in 2026 and 2.8% in 2027 in real terms. Although fiscal measures may temporarily stimulate demand, the public’s cautious financial behavior and the uncertain environment will continue to act as restraining factors.

The think tank expects a cautious improvement in investment. After more than three years of weak investment performance, real growth of 0.5% is projected for 2026 and 2.8% for 2027. This turnaround could be aided by the resumption of postponed developments, a gradual improvement in the external environment and projects related to new industrial capacities.

Overall, according to the Equilibrium Institute's projections, the Hungarian economy may emerge from its multi-year stagnation in 2026, but growth will remain fragile. Domestic consumption could be the main driver of expansion, while inflation, exchange rates, geopolitical risks and fiscal balance will remain key factors in the coming period.