Raiffeisen: Hungary to be hit by a brutal recession

Raiffeisen Bank’s experts spoke about inflation, the energy crisis and the foreign debt crisis at their press conference. Continue reading below for more details.

Raiffeisen Bank experts also spoke about the interest rate hike, the current economic challenges in the EU and the US, and the oil market. They think inflation could peak at around 14 percent and the central bank’s rate-hiking spree could continue. Furthermore, they looked at what is in store for the oil market and what issues Europe is facing, writes Pénzcentrum.

Hungary and a brutal recession

“The government held a crisis meeting, this shows we really need to prepare,” said Zoltán Török, an analyst at the bank. There is no telling how severe the energy crisis will be, and Hungary needs to prepare for bad and worse. The bank expects that the country will be in a situation where there will be energy shortages. However, this will not affect the majority of the population but rather the large industries. There is a very rapid turnaround: in the first quarter it was 8 percent, that is now a thing of the past. In the second quarter, it was 5.5 percent. By the end of the year, the growth rate will turn deeply negative.

The recession will be caused by a slowdown in external demand and very high inflation, which will rise even further. The labour shortage will also do its bit: there will be a jobs shortage in up to two or three quarters, but he says unemployment will not be high. However, business investments are also being hit by poor investment appetite and very high-interest rates: next year will not be a happy one either, according to Zoltán Török.