GKI Gazdaságkutató Zrt. 2023/4. forecast for 2023-24

The external balance (current account), which was dramatically in deficit in 2022, turned positive already in the second quarter of 2023, the recession ended in the third quarter, inflation already reached single digits in October, and even if only very partially, the EU came within reach -access to transfers. At the same time, the public budget deficit is much higher than planned; Inflation was the highest in the EU even in October, and it will be the highest on an annual average. The expected Hungarian economic downturn this year will probably be the second deepest (after Estonia). By 2024, it is modest, faster than the EU average (1.3%), but only a weak medium (2-2.5%) growth is expected in the region. The decrease in inflation is feared to slow down sharply, while an excessive deficit procedure may be launched against Hungary due to the public budget deficit of over 3%.

In essence, GKI confirms its September forecast for 2023-24. In 2023, it expects a 0.5% drop in GDP, and a 2-2.5% expansion in 2024. This 2023 forecast was considered very pessimistic at the beginning of the year, but is now more optimistic. The fact that the Hungarian economy is only expected to decline by around 0.5% in 2023 is due to the approximately 60% expansion of the agricultural GDP. If the agricultural GDP had only reached the level of 2021, the decline of the Hungarian economy would be around 2%. The GKI did not change the forecasts of -1.5% for residential consumption (but within this, -3.5% for purchased consumption) and +2% in 2024, and -10% and -2% for fixed asset accumulation. . (In terms of investments this year, a somewhat larger decline is conceivable.)