OTP Forecasts 1.7% GDP Growth for 2026, 2.5% for 2027

Analysts of Hungarian lender OTP said on Friday in a quarterly forecast that Hungary’s GDP could grow by 1.7% this year and increase by 2.5% in 2027.

The director of OTP's analysis center, Győző Eppich said household consumption is expected to drive growth this year, but exports may also help following two years of decline. Investments continue to be a drag primarily due to weaker-than-expected public investment activity even as corporate investments are reviving.

Next year, there may be a turnaround in state investments thanks to EU funds, and exports may receive an additional boost from the newly entering capacities, but consumption may grow at a lower rate due to the expected slowdown in wage growth and lending activity.

Győző Eppich said that in recent months, inflation has been lower than expected, mainly due to the significantly strengthening of the forint and favorable trends in food prices. Inflation could average 1.7% this year and could rise to 2.6% next year, though there are upside risks from persistently high energy prices, drought and fertilizer shortages.

He noted the forint’s exchange rate to the euro has been stable at around 360 during the summer and they do not consider a significant forint depreciation likely.

According to OTP’s analysis, the market does not currently expect further interest rate cuts from the National Bank of Hungary for the remainder of the year, because of persistently high energy prices and rising bond yields in developed markets. Lower interest rates could only be considered this year if the risk premium on Hungarian assets declines further.