The European Commission has projected Hungary’s GDP growth at 2.4% this year in an interim forecast published on Thursday, unchanged from its autumn forecast released in November. The EC's forecast for 2025 GDP growth remains at 3.6%.
The EC said Hungary’s economy is set to recover gradually in 2024-2025, supported by decreasing inflation and interest rates over the forecast horizon. The EC acknowledged the “substantial boost” to household income provided by a 15% minimum wage hike in December. Real income growth and improving consumer confidence are projected to spur household consumption, while a reduction in central bank interest rates is expected to contribute to the gradual recovery of investment, the EC said. New FDI projects are set to boost exports over the forecast horizon, it added. Hungary’s economic outlook remains sensitive to global investor sentiment, the EC said, also noting the country’s exposure to energy price changes and potential supply disruptions due to its large dependence on energy imports and its limited scope for import diversification in the short term. The EC puts Hungary’s average annual CPI at 4.5% in 2024, down from 5.2% in the autumn forecast.