Kopint-Tárki: Hungarian economy to slam on the brakes
Currently, we expect GDP growth of only around 0.4% for this year, which may be followed by moderate acceleration in 2026,
according to a recent report by the Kopint-Tárki Economic Research Institute. They add that even this growth forecast is burdened with negative risks.
Looking ahead to the rest of this year, there are two main factors that could lead to a slight economic upturn:
- Firstly, consumption may pick up slightly as a result of the rise in family tax allowances and tax exemptions for mothers with three or more children. Food vouchers for pensioners and the November pension supplement may also provide a one-off boost to consumption.
- Secondly, in the best-case scenario, the decline in investment may slow down to near stagnation by the end of the year. However, this is highly uncertain, as apart from the extremely low starting point, there are few signs of positive momentum that could boost appetite for investment.
As far as external demand is concerned, they only expect a very slight improvement, given that the global economic outlook has not significantly improved. Nevertheless, exports may grow slightly by the end of the year, possibly due to the commissioning of the BMW plant, although this could also give imports a slight boost.
Kopint-Tárki estimates that the growth rate could accelerate to around 2.5% in 2026.
Next year, the 'firearms money' and an additional increase in the family tax credit could significantly boost consumption, and housing investment could also begin to grow.
Cover image (for illustraion purposes only): Getty Images
