The Hungarian economy will return to growth in the second half of the year, and next year it could perform above the EU average, the Hungarian Finance Ministry informed.
“The fundamentals of the economy are stable: employment remains at record levels, the unemployment rate is one of the lowest in the European Union, the performance of agriculture and foreign trade is strong, and inflation is on a downward path”, the statement said.
The adverse effects of the Russia-Ukraine war and the EU sanctions continue to create an unfavorable external environment. According to the first estimate of the Hungarian Central Statistical Office (KSH), the Hungarian economy’s performance declined by 2.3 percent year-on-year in the second quarter and by 0.3 percent compared to the first quarter.
“The European Commission is worsening our economic performance by withholding the funds due to Hungary”,
the statement said. While the outlook for Europe is currently not favorable, the Hungarian economy could return to growth in the second half of the year. In the coming months, real earnings and consumption growth, industrial growth and an improving external trade balance should also have a positive impact on economic performance.
The combined impact of government measures could bring inflation down to single digits before the end of the year.
The labor market, the mainstay of the economy, continues to prove resilient, with employment at a record high of almost 1 million new jobs created since 2010 and an unemployment rate of 3.9%, one of the lowest in the EU.
Hungary’s investment rate is currently the highest in the EU, above 28% of GDP, which will support growth in the coming years, the Finance Ministry statement stressed.
Via MTI; Featured Photo: KSH, MTI