K&H analyst commentary: Hungary can reach its potential level

The Hungarian National Bank expects GDP growth of 0.6 percent this year, 2.8 percent next year, and 3.2 percent in 2027. In addition, the annual average inflation rate may be 4.6 percent this year, which may slow down to 3.8 percent next year. The 3 percent inflation target, which represents the price stability level, will be achieved in 2027, according to the latest central bank forecast.

Commenting on the MNB forecast, Dávid Németh said that there is no significant change in the new forecast compared to the previous forecast published in June. The biggest change is that the central bank expects GDP growth of 0.6 percent this year, while in the summer it still considered a 0.8 percent increase likely.

“The central bank’s expectation of 0.6 percent economic growth this year is in line with our forecast. At the same time, the central bank staff paints a more optimistic picture for 2026, as K&H expects a surplus of 2.4 percent compared to the 2.8 percent growth forecast,” the expert added. The difference may arise, among other things, from the fact that we see the development of the external economic environment differently. In addition, we can also see the increase in investments somewhat differently. It is important that Hungary’s potential growth rate is around 2.5 percent in the current economic environment, which means that the central bank, the market, and K&H forecasts are essentially at this level,”

– he added.