Hungary

Hungary’s Economy Bounces Back: Recession is Over

Hungary’s Economy Shows Signs of Recovery with GDP Growth

Hungary’s GDP saw a 0.4% year-on-year increase in the fourth quarter, according to the latest data released by the Central Statistics Office (KSH). When adjusted for seasonal and calendar year effects, GDP rose by 0.2%. The growth was driven by the services sector, while the farm, industrial, and construction sectors had a negative impact on the overall figure. In a quarter-on-quarter comparison, GDP rose by 0.5%, marking the end of a technical recession, as stated by KSH. For the full year, GDP increased by 0.5% unadjusted and by 0.6% adjusted. KSH will release a second reading of the data on March 4.

National Economy Minister Martin Nagy commented on the data, describing it as a “turning point” for the economy. He highlighted the recovery of the domestic economy, the strengthening middle class, and an improvement in consumer confidence. Record high employment levels, rising real wages, increasing retail sales, a booming tourism sector in 2024, and a rise in home and vehicle sales were also noted by Nagy.

Looking ahead, Nagy mentioned that households’ situations would continue to improve, aided by the government’s new economic policy action plan and returns from maturing inflation-linked retail government securities. He also pointed out the availability of funds for businesses through the Demjan Sandor Programme, with expectations of GDP growth accelerating in the upcoming quarters, potentially surpassing 3% in the second half of the year.

Nagy expressed optimism for a sustained turnaround in businesses, especially with a recovery in external demand, particularly from Germany post-elections. The future looks promising for Hungary’s economy, with a positive outlook for growth and development in the coming months.

 

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