This year is likely to bring a 0.5% drop in economic performance and 19% inflation

Last year real wages grew by 2.6%, and if this year gross salaries increase by 15% and prices become 19% higher, it will mean that real wages reduce by 3.5%. Consumption expanded by 6% in 2022, but this year is forecasted to bring a 3% drop in this respect. In Hungary the rate of investment is one of the highest in the European Union, around 27-28%. The Hungarian economy will be forced to stay on an export-driven path in 2023.

The number of workers has been decreasing since September 2022, and the decrease was 0.8% until January. Since June 2022 the level of unemployment has been growing, from the 3.4% in June to 4% this February. Last year the inflation rate was 14.5%, but it is expected to climb to 19% this year. GKI calculates with a 400-forint euro after last year’s 392-forint exchange rate. In 2022 the current account deficit was EUR 13.1bn, but this can drop to EUR 9bn in 2023, and the financing need is expected to fall back to EUR 6bn from EUR 9.1bn. //

This article is available for reading in Trade magazin 2023/5