Real wages, reflecting purchasing power, have risen by around 10% since December 2023.Continue reading
The Ministry for National Economy has tied the pace of Hungary’s economic growth to the resolution of the ongoing war in Europe, stating that “the sooner peace is achieved, the faster the economy will grow.” The statement was issued in the Ministry’s commentary on the latest GDP figures released Wednesday.
According to the Central Statistical Office (KSH), Hungary’s GDP grew by 0.2% year-on-year in the second quarter of 2025, while seasonally adjusted data show a 0.4% increase compared to the previous quarter. Despite the modest figures, the Ministry remains cautiously optimistic, projecting a 1–2% annual growth rate in the third and fourth quarters, leading to an overall 1% GDP increase for the year.
The Ministry emphasized that domestic consumption remains the primary driver of growth, with investment playing an increasingly significant role.
Government measures continue to support this trend, the statement said.
Among these are programs aimed at households, pensioners, young families, and small and medium-sized enterprises (SMEs), such as the expanded Otthon Start home ownership initiative, the doubling of family tax benefits, tax exemptions for mothers with three and eventually two children, food vouchers for pensioners worth HUF 30,000 (cc. EUR 75), and the Demján Sándor Program, supporting small and medium enterprises.
The government also highlighted its fiscal discipline, stating that strict budget control and strong domestic consumption are keeping public finances balanced. This fiscal stability, they noted, is crucial for funding the growing range of social and economic support programs.
However, external challenges continue to weigh on the economy. The Ministry pointed to a weakening German economy, global trade tensions, and a poor agricultural season caused by drought as key drags on GDP. Still, these were partially offset by gains in the services sector and a turnaround in construction activity. Looking ahead, the Ministry reaffirmed its six-pillar economic strategy aimed at long-term, sustainable growth:
SME development, the construction of 150 new factories, continued tax cuts, inflation containment, housing support, and wage increases.
Over 70 government measures are currently in place to support these goals.
As long as the Russian-Ukranian war continues, the current growth rate is realistic. But if peace comes, growth will accelerate. The sooner peace is achieved, the faster the economy will grow”,
the Ministry concluded its analysis.
Via MTI; Featured image: Unsplash