Dark prophecy for the Hungarian forint: 400 EUR/HUF soon?

Equilor Investment Consultant Ltd. expects the forint to continue losing value in the coming months. We may see a 400/EUR exchange rate by the end of this year. Having said that, it was also revealed at a press event on Wednesday morning that Equilor does not expect the recession in Hungary to ease by the third quarter of this year. However, the Hungarian economy as a whole could still contract by 0.7%. Although inflation is slowing, it could still be high in 2024.

As we have reported HERE, the forint has been in a steady decline since mid-summer; it fell to the 375/EUR zone. On Wednesday, it was sitting at 385/EUR, and it is still on a downward slope, according to analysts.

Current Hungarian economic climate

As Porfolio reported, the recession may not end until the third quarter of this year. Several factors play a role in this negative trend, but the most prominent of all is the country’s sky-high inflation, which has profoundly destroyed consumer confidence. The fact that the government is further postponing investments does not help either. On top of that, it is understood that a new tax adjustment may be on the cards, too.
Besides all that, Germany’s industrial scene is also struggling. As the most important export market for Hungary, the country’s weak industrial performance has a direct impact on the domestic economy.
On the positive note, real wages are slowly turning upward, while interest rates began to drop. Thus, the economy could likely reboot next year. Another good news is that inflation may be in a single digit by November, while annual inflation could be around 6% next year (compared to this year’s 18%).