Domestic Economy Will Avoid Recession This Year

The Hungarian economy will avoid recession this year despite the ongoing war and Brussels sanctions and could return to a high growth path next year, the Hungarian Ministry of Finance forecast in a statement Tuesday.

The economy’s fundamentals are strong, employment is still at 4.7 million, unemployment is among the lowest in the European Union, and investment and export performance is high, according to the ministry.

Although Hungary has still not received the recovery funds to which it is entitled, the performance of the Hungarian economy is already 4 percent above pre-epidemic levels, compared with an EU average of about 3 percent.

After recovering from the consequences of the epidemic, the Hungarian economy faced a number of challenges due to the dangerous international environment. Nevertheless, growth in 2021 was 7.2 percent, compared to 4.6 percent last year.

In 2023, the ongoing war between Russia and Ukraine and the negative impact of the Brussels sanctions will continue to create an unfavorable external environment.

With the recovery funds due to Hungary, the economy would have grown by more than five percent last year, but the European Commission has worsened our economic performance and competitiveness by withholding the funds,”

the Finance Ministry affirmed.

The negative impact is also affecting this year’s economic performance: First-quarter GDP fell 0.2 percent from the previous quarter and 0.9 percent on an annual basis, but growth could return in the coming quarters.

The latest forecasts from the European Commission and the International Monetary Fund predict that the Hungarian economy will avoid recession this year.

The government will continue to improve balance sheet indicators in a dangerous international environment and ensure the country’s security, protect families, pensions, jobs, and guarantee additional cost reductions, the Finance Ministry assured.

Featured image: Facebook/Audi Hungaria Győr