Hungary: Growth strengthens but structural limits remain - ING
ING economists Peter Virovacz and Zoltán Homolya see Hungary on a gradual but constrained growth path after Gross Domestic Product (GDP) rose 0.5% QoQ and 1.7% YoY in the second quarter.
Hungary's economy is experiencing a gradual growth path, with GDP increasing by 0.5% quarter-over-quarter and 1.7% year-over-year in the second quarter. ING economists Peter Virovacz and Zoltán Homolya forecast 1.7% growth in 2026, driven mainly by consumption. However, weak investment, net exports, and structural demographic and capital-stock constraints remain significant challenges.
Consumption growth may be strengthened by the rise in real disposable income and consumer confidence. The decline in investment partly due to reviewed and suspended projects initiated by the previous government, which could see a sharp rise later in the year due to EU funding. Export growth may face obstacles from geopolitical uncertainties, rising production costs, and potential supply disruptions.
By 2027-2028, continued domestic demand strengthening and external demand pickup could result in GDP growth around 3.0%. However, stagnating capital stock and declining demographics make a sustained growth above 3% increasingly unlikely in the long term.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
