Hungary flag Hungary: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Contrasting with the trends observed in recent years, Hungary's GDP contracted sharply following the outbreak of the COVID-19 pandemic, as the backbone of growth - rising household income and exports - was severely impacted. Nevertheless, the economy was dynamic in 2021 despite headwinds from global supply chain disruptions, with an estimated growth of 7.6% (IMF). Underpinned by continuing fiscal stimulus measures and household consumption, economic growth is set to remain strong at 5.1% in 2022, before moderating to 3.8% in 2023 (IMF forecast).

Public finances have also been affected by the pandemic and the measures taken to contain its economic effects – including a one-time income tax refund to families with children, a subsidised loan programme for SMEs, an income tax cut for workers under age 25, the re-introduction of the 13th monthly pension and administrative wage increases – with an estimated budget deficit of 6.9% in 2021. As most measures fade out, the deficit is expected to decrease to 5.3% this year and 3.2% in 2023. Likewise, the debt-to-GDP ratio should resume its downward trend over the forecast period after reaching 76.6% in 2021. Public investment in 2022 will be partly financed by rising EU funds, which are also expected to provide a boost to investment. Rising commodity prices and wage pressures contribute to persistently high inflation: regulated prices for residential energy contributed to shield households from commodity price increases; however, companies are expected to pass their higher energy and wage costs on to consumers, fuelling non-energy inflation. Overall, the rate was estimated at 4.5% in 2021 by the IMF and it is forecast at 3.6% in 2022 and 3.3% in 2023.

Employment reached its pre-pandemic level in the summer of 2021 and job creation is set to continue as the economy grows. The rate was estimated at 4.1% in 2021 (from a pre-COVID level of 3.3%); as the IMF expects unemployment to stabilize around 3.8% over the forecast period. Meanwhile, wage growth is set to remain robust amid emerging signs of labour shortages, following the approval of a 20% minimum wage hike and sizeable salary increases in the public sector.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 163.49155.01e180.96198.99216.44
GDP (Constant Prices, Annual % Change) 4.6-5.0e7.65.13.8
GDP per Capita (USD) 16,729e15,866e18,52820,38022,174
General Government Balance (in % of GDP) -3.4-7.3e-6.9-5.3-3.2
General Government Gross Debt (in % of GDP) 65.580.4e76.675.673.1
Inflation Rate (%) 3.43.3e5.110.36.4
Unemployment Rate (% of the Labour Force) 3.34.1e4.13.83.8
Current Account (billions USD) -0.74-0.15e1.091.753.27
Current Account (in % of GDP) -0.5-0.1e0.60.91.5

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Hungarian Forint (HUF) - Average Annual Exchange Rate For 1 ZAR 19.1420.6320.3920.1918.70

Source: World Bank, 2015

 

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Latest Update: June 2022