Hungary’s inflation to be the highest, economic growth among lowest in EU this year: EC
Hungary’s GDP to Slow in 2023 According to European Commission Forecast
The European Commission released its spring forecast on Monday, revealing that Hungary experienced a contraction in GDP and an increase in inflation during the second half of 2022. The report predicts that Hungary’s annual GDP growth will decrease from 4.6 percent in 2022 to 0.5 percent in 2023, before recovering to 2.8 percent in 2024.
The EC also noted that the annual average inflation rate is expected to rise from 15.3 percent in 2022 to 16.4 percent in 2023 before dropping to 4.0 percent in 2024. The budget deficit remained high at 6.2 percent of GDP in 2022, but the EC forecasts it will decrease to 4.0 percent this year and to 1.5 percent in 2024.
In addition to economic concerns, the EC report highlights that shortages of skilled workers are expected to persist, which will be exacerbated by population aging. Nominal wage growth is projected to remain robust, but real wages are currently declining due to high inflation. The EC predicts that real wages will begin to rise again in autumn 2023.
Earlier in the year, the forint broke a psychological barrier, strengthening to a level not seen in a long time.
