The economy is starting to grow, but may grow more slowly than expected next year

This year started favorably for the Hungarian economy, but the second and especially the third quarter shattered the optimism at the beginning of the year. Erste analysts currently expect annual GDP growth of around 0.5 percent to be realistic for 2024. This year’s significantly weaker-than-expected expansion will affect the economy’s performance next year. This, combined with the stagnant, subdued external environment and the still uncertain economic outlook, could result in GDP growth of around 2 percent in 2025, Erste said at a press conference.

The biggest problem is the general lack of confidence. Consumer and business confidence indices also show that economic actors are generally pessimistic about their prospects. This is why there is less investment and the performance of the construction industry is declining. The volume of new contracts in the construction industry has also shown a slightly downward trend in recent months after two years of stagnation. Although significant investments, primarily related to the automotive industry, may start production in the coming years, it is uncertain to what extent companies will be able to utilize their planned capacities due to the current situation in vehicle production.