Positive turn in Hungary’s economy, stronger forint expected soon

Péter Virovácz, the leading economist of ING Bank, shared an analysis of the prospects of the Hungarian forint and the country’s economy. He wrote that the recession still rules Hungary, but it will not be long. Hungary’s GDP may increase by 0.7 percent in 2023 and it will have a positive effect on the currency exchange rate of the forint.

Mr Virovácz said the Hungarian economy would probably show signs of contraction in the first quarter of 2023. That is because of the high inflation suffocating multiple segments of the economy, from consumption to investments. The inflation is expected to fall from February and will strengthen in mid-2023. As a result, the GDP will also start to increase.

In the second half of 2023, the export will be the engine of economic growth, portfolio.hu wrote based on Virovácz’s analysis. In 2024, he expects a dynamic economic expansion in Hungary. The sources will be the softening monetary conditions and the income of EU funds. The leading expert of the ING Bank expects an average of 19 percent inflation in 2023.

He said the Hungarian National Bank (MNB) would wait until May-June to lower the base interest rate. He added that the MNB would only start gradually decreasing it in the final months of this year. But that process will be slow.