Hungarian economy back on growth track, finance minister says

Source: Facebook/Varga Mihály

Hungary’s economic prospects are heartening, with growth estimated at 3-4 percent in 2024, the finance minister told a meeting of the Official Monetary and Financial Institutions Forum (OMFIF) in Budapest on Thursday.

Hungary’s economy rebounded quickly after the coronavirus pandemic, Mihály Varga told the meeting of the London-based think tank for central banking, economic policy and public investment. In 2021, the country’s GDP jumped by 7.1 percent, he added. The conflict in Ukraine dampened growth, but Hungary is expected to expand again in 2024, he added.

The labour market remained stable, with a low unemployment rate and a 75 percent employment rate, he said.

Inflation peaked at 25.7 percent in January and fell to 9.9 percent in October, he said.

The current account balance has improved in the first half of 2023, and the foreign trade balance is expected to hit a record. Hungary’s investment rate is the highest in the European Union, and it is expected to grow further, thanks to a 9 percent corporate tax, the lowest in the EU, he added.

The ESA deficit is expected to come to 5.2 percent of GDP this year and fall to 2.9 percent in 2024, he said.

Barnabás Virág, the deputy governor of the National Bank of Hungary (NBH), told the forum that breaking down inflation has been a challenge in central Europe. The fact that it is around 3 percent in the euro zone and the US is a good sign, he said. Inflation is expected around 7 percent in Hungary in December, he added. Three-month core inflation has fallen below 4 percent, he added.

The base rate is expected to be below 11 percent by year-end, and in single digits by February, he said.

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2 Comments

Norbert says:

16/11/2023 at 17:17

Our core inflation (all commodities, services, and goods in the economy excluding volatile items such as food and fuel) is actually still over 10 percent:

https://tradingeconomics.com/hungary/core-inflation-rate

Trade balances hitting “a record” is actually a bad thing – it basically means domestic consumption has stalled:

https://tradingeconomics.com/hungary/balance-of-trade

Our exports fell, and our imports fell even further. Politicians dazzling us with… Not quite sure. They are hopeful, though! Waiting for economic gravity to do its magic.
Apprehensiveness : says:

17/11/2023 at 07:43

Mihaly Zarga – Finance Minister, is an “aged” user of the propaganda Orban/Fidesz machine.
He is a Political “spinner” that just presents from his desk feeds out figures and information, that paint pictures that are wrapped in HOPE.
This “up-beat” talk on the Hungarian economy, presented by Mihaly Varga, a current PR game and coming out of “other” Orban Ministers mouths, is not near factually true of the depleted or smashed position that the Economy of Hungary remains.
The componentry in its Major parts of the Hungarian Economy remains still in a position, that is likely to decline rather than the “rosy” pictures painted AGAIN by the Minister of Finance – Mihaly Varga, and the Orban Government.