Government: Hungary to avoid recession this year, experts disagree
Hungary’s economy is projected to avoid a recession in 2023, and return to steep growth next year, despite the protracted war in Ukraine and the European Union’s sanctions on Russia, the finance ministry said on Tuesday. However, according to experts, there are still tough times ahead, and this might not even be the rock bottom yet.
What does the government say?
The economy’s foundations are robust, with one of the lowest unemployment rates in the EU and the number of jobholders stable around 4.7 million. The country’s investment rate and export performance remain high, the statement said. Although Hungary is yet to receive the funding “it is entitled to” from the EU’s Resilience and Recovery Facility (RRF), its economic performance is 4 percentage points above the level it was before the coronavirus pandemic, while the EU average hovers around 3 percentage points higher, it said.
Economic growth was 7.2 percent in 2021 and 4.3 percent in 2022, despite the challenges Hungary faced in a “dangerous international environment,” the statement said. The protracted Ukraine-Russia war and the related EU sanctions continue to weigh on the international environment in 2023. “Had Hungary been able to use the recovery funding it is entitled to, economic growth would have been above 5 percent. By withholding the funds, the European Commission hobbled our economic performance and competitiveness,” it said.
GDP edged down by 0.2 percent in the first quarter, compared with Q4 2022, and by an annual 0.9 percent. However, the economy is expected to expand again in the subsequent quarters, the ministry said. According to forecasts by the EC and the International Monetary Fund, Hungary will avoid recession in 2023, it said. Government measures to improve the balance indicators will ensure the country’s security, protect families, pensions, jobs and maintain the utility price caps, the statement said.
What do experts say?
On the contrary, experts are not very optimistic about the future. According to Péter Virovácz, analyst at ING, the chances are 50-50 percent that our economy will emerge from the technical recession before the third quarter or not. Péter Kiss, investment director at Amundi Fund Management, thinks there will still be a slight downturn in the second quarter of April-June, hvg.hu reports.
Both analysts said that the 0.2 percent quarterly decline was not as bad as experts had previously expected. However, as Virovácz pointed out, the KSH has now revised the previous quarters’ data downwards, resulting in a smaller-than-expected decline against a weaker base.
It is not a surprise that the economy fell mainly because of industry. Furthermore, the good performance of agriculture is more of an estimate, due to the fact that last year was very bad, but the season will start later, Péter Virovácz noted.
Péter Kiss pointed out that household consumption is falling due to high inflation. Meanwhile, high energy costs and high interest rates are weakening manufacturing and reducing investment. In addition, although recessions usually put a brake on price increases, inflation is not expected to fall below 20 percent at all until July.
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5 Comments
The KSH is controld by our Viktator, so they will do whatever he says. He says no rescission-There will be NO rescission.
Well – upside is that the EU insists on pretty granular reporting, then there’s Intrastat! Let’s see if our Politicians will own the definitive results, when the data comes out. Not holding my breath.
Point is – our inflation is insanely high – don’t take my word for it: https://www.statista.com/statistics/225698/monthly-inflation-rate-in-eu-countries/
Quick look at Biden’s America: https://tradingeconomics.com/united-states/inflation-cpi – there may be lots “wrong”, but at least their economic fundamentals look OK (as opposed to … Hungary)
So – if things play out, we will receive the European Union funding, and that will make our economy grow (as it has since we joined – the EU has funded our growth). However – even if our economy grows … Our purchasing power will be greatly diminished (anyone received their 20% plus pay rises, yet)?
The “Worsening” Debt burden on Hungry, that over 13 years Orban has held Government in Hungary, against ADVICE of “Real” Economic & Financial Global & European experts – who WARNED Orban/Hungary, he was sending Hungary, on a treacherous and dangerous ECONOMIC path.
MOVEABILITY – the ability to adjust an ECONOMY – the focus of its DIRECTION, this was WARNED to Orban – that he had NO back-up or contingency Economic plan for Hungary – in the event of an unexpected DISASTER.
February 2020 on arrived Coronavirus then the Russian War on the Ukraine, then the discovery “Findings” and Judgements – by the Courts of the European Union, that Hungary was Guilty of FALSENESS in submissions for European Union Funding, which has seen led on to the Cataclysmic COLLAPSE of Hungary’s membership – its FUTURE as a European Union Member.
This day – it continues the PULPERIZATION of the Economy of Hungary.
The “Burden” on its SHOULDERS growing the RECESSION debate needs replacing to ask the question – is Hungary solvent or in an INSOLVEVENT Economic & Financial position???
Orban has taken us to an INSOLVENT position, as a country, that the magnitude of effects or the RAMIFICATIONS are far wider and broader – than if Hungary was – as we FACTUALY are – in a RECESSION.
Hungarians have to get there HEADS around this FACT, that the Hungarian economy- is heading into nadir, and its end will be cataclysmic.
The componentry that are the Engine Room of the Hungarian economy – the BURDEN on them, sending them LOWER – is no-where in sight of an END.
Stability – the ability of a Government of a country to enable it-self to FACTUALY say – we are in a pattern within our Economy that is of SUSTAINABILITY.
Hungary – no Stability nor Sustainability likened to an ISOLATED island that friendships of country’s Governed under DEMOCRACY have been destroyed by the Orban “creed & dogma” – the WRONGFUL and FATAL undertakings that for the future of Hungary – his Orban’s political ideas and philosophy – that will end for Hungary – a DESTRUCTION.
The destruction of DEMOCRACY by Orban, over 13 years – in Hungary, the establishment, and “explosive growing relationships with China & Russia – there are NO bright and shining LIGHTS coming short, mediumn or long term on the ECONOMY of Hungary.
Nothing is going to get CHEAPER and the “Blood Path” – the savagery – occurring within the Property and Construction Industry worsening, the “Doomed” forint, times ahead in Hungary – TREACHOUROUS.
WATCH – the PROPAGANDA Orban machine ///
Victor Orban – through his in-ability to understand over (13) thirteen years in Government – the question of building the Capital Wealth of Hungary – has failed his intellectual economic capabilities.
Hungary – we have no growing nor CAPITAL in our Economy.
Orban’s plan on-going – increased foreign ownership of country’s, investments by country’s – into Hungary – his CHINESE “Mates” – this idiotic economic plan for the FUTURE of Hungary does not build CAPITAL.
European Union – on-going with Hungary unless Hungary under Orban comes back into line and FOLLOWS the GOSPEL of membership of being a European Union Member to be and practice DEMOCRACY – the future of HUNGARY in the EU should remain a NO go.
Orban – rules the Media – rules the Judiciary – Rules by Decree – wow and there’s more as we KNOW – and for Orban to reverse ALL these actions against what is DEMOCRACY the European Union ways of Membership LAW, the Hungarian Prime Minister has DRIVE Hungary away from Democracy to a DICTATORSHIP regime.
Orban -China and Russia – he can’t LIVE – he can’t SURVIVE now and into the FUTURE without getting DEEPER into relationships with these DICTATORSHIPS.