ING forecasts 1.5% GDP growth in 2025

Hungary’s GDP could grow by 1.5% this year and inflation could average 2.3%, ING Bank chief analyst Péter Virovácz said on Wednesday presenting the lender’s latest forecast.

Péter Virovácz said GDP growth would be supported by consumption in 2025. By next year all segments of the economy could contribute to growth, bringing more balanced expansion and a 2.6% GDP increase in 2026.

The analyst said the inflation situation is favourable, the forint exchange rate may stabilize in the HUF 350-360 range compared to the euro by the end of this year, even with the National Bank of Hungary’s (NBH) interest rate cut cycle that has started.

Inflation could be at 3.8% in 2027, then fall to 3.1% in 2028, he said.

ING expects the NBH’s base rate to be down at 5.25% by the end of the year, edge down to 5.0% in 2027 and to be at 4.0% in 2028.

Péter Virovácz said market confidence is still supportive of the new government, reflected in the strengthening of the forint and the favourable yield environment. Geopolitical tensions, the economic structure, and demography limits the work of all governments, to which are now added inherited measures from the previous administration and politically sensitive transformations.

According to the analyst, while improving confidence, the arrival of EU funds, and industrial investments can put the economy on a new growth path, inflation, labour shortages, energy supply uncertainty, and meeting the conditions for euro adoption remain serious challenges.

Péter Virovácz said in the coming period inflation convergence will remain the main constraint to euro adoption, which, considering current economic trends, could be more realistic between 2030 and 2034.