The GKI expects economic growth of 2-2.5% in 2025

By: Trademagazin Date: 2025. 02. 28. 08:26

GKI Economic Research Ltd. forecasts GDP growth of 2-2.5% for 2025, which may be achieved through the recovery of external demand, government economic policy measures and the expansion of domestic consumption. At the same time, geopolitical risks, the development of the global economic environment and the pace of investment activity must continue to be monitored, all of which may affect growth prospects.

Hungary’s gross domestic product (GDP) in the fourth quarter of 2024, according to seasonally and calendar-adjusted data, exceeded the level of the same period of the previous year by 0.2%, while it showed a growth of 0.5% compared to the previous quarter. This means that the economy has technically exited recession. In the entire year 2024, the volume of domestic GDP production expanded by 0.6%. The publication of detailed KSH data in early March is expected to confirm this trend, based on which 2024 will go down in economic history as a year of moderate growth.

Looking at the prospects for 2025, there is reason for optimism that the Hungarian economy’s foreign sales opportunities are gradually improving. Although a short-term settlement of the Russian-Ukrainian conflict remains unlikely, economic confidence in the European Union is gradually strengthening. The EU economic sentiment index published by the European Commission also rose during January and February, reaching a 22-month high. In particular, expectations in the industrial sector improved, which is a positive sign for Hungarian exporters. In Germany, our country’s most important trading partner, the industrial confidence index also showed an increase, which may provide further impetus to the Hungarian economy. In addition, the competitive exchange rate also supports the export opportunities of domestic companies.

The expectations of the Hungarian business sector also show an improving trend. The GKI business confidence index increased by about 2 points in February 2024 compared to the previous month. If this trend continues, it could strengthen the sustainability of economic growth.

The government is taking active steps to boost the economy. The New Economic Policy Action Plan aims to improve the business environment, especially the operating conditions of small and medium-sized enterprises (SMEs). The program includes, among other things, export promotion and deployment loan programs, as well as measures aimed at stimulating domestic demand (such as worker loans, increased personal income tax relief, and a three-year wage agreement). The Sándor Demján program serves to strengthen SMEs, which supports technological innovation and digitalization. In addition, loan, leasing, and capital programs worth HUF 400 billion are available to increase the competitiveness of domestic enterprises.