Economic Outline

Economic Indicators

GDP is projected to grow by 1.8% in 2026 and 2.1% in 2027, supported by domestic demand and a recovery in exports. Consumption grew steadily due to a resilient labour market, high wage increases, and monetary policy accommodation. However, investment remained weak amid postponed public projects and declining business sentiment. Exports were hampered by subdued demand from trading partners, particularly for machinery and transport equipment. For 2025 as a whole, growth came in at 0.5% according to the EU Commission (0.3% on the HCSO's adjusted data), with a projection of 1.8% in 2026 and 2.1% in 2027, driven by strong consumption supported by real income growth and a declining household saving rate. Investment growth may face challenges due to uncertainties in the automotive sector. Exports are expected to rise gradually, boosted by foreign investment in manufacturing, while recovering domestic demand is likely to increase imports and narrow the current account surplus.

Hungary's budget deficit fell from 5.4% of GDP in 2024 to 4.7% in 2025, driven by reduced utility subsidies, postponed public investments, and a moderate tax revenue rebound. The net cost of energy price mitigation dropped from 1.6% to 0.9% of GDP. The deficit is expected to widen again to 6.2% in 2026 and to stand at 5.8% in 2027. Fiscal policy is projected to be expansionary, with subdued primary expenditure growth and declining interest costs. Capital spending is set to rise gradually, while the phasing out of windfall taxes may reduce revenue by 0.6 pps. of GDP in 2025. Hungary's debt-to-GDP ratio reached 74.6% in 2025, driven by a persistently high budget deficit. It is expected to rise to 75.1% in 2026 and 76.8% in 2027, as elevated deficits outweigh nominal GDP growth. HICP inflation fell from 17.0% in 2023 to 3.7% in 2024, before edging back up to 4.4% in 2025, as the effects of previous energy and food price hikes and supply chain issues eased. However, inflation excluding energy and food remained high at 5.6%, driven by past inflation impacts on services, strong wage growth, rising consumer demand, and currency depreciation. Underlying inflation is expected to gradually slow as commodity prices and wage growth decrease. HICP inflation is forecast to decline from 4.4% in 2025 to 3.2% in 2026 and 3.1% in 2027 (data EU Commission).

The unemployment rate rose to 4.4% in 2024, up from 4.1% the previous year (IMF). As the economy recovers, labour demand is expected to rise, leading to a gradual decline in the unemployment rate. While the labour market will tighten, nominal wage growth is projected to ease in 2026 and 2027 as the impact of past minimum wage increases fades. Overall, GDP per capita (PPP) in Hungary was estimated at USD 49,838 in 2025, still below the EU average (USD 65,503 – World Bank), while 19.5% of the population was at risk of poverty or social exclusion as of 2025 (Eurostat, latest data available).

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