K&H Analyst Commentary: The Hungarian economy is still performing modestly

Dávid Németh, senior analyst at K&H, said that the latest data is essentially in line with market expectations. “We expected a slightly weaker result, forecasting a quarterly decline of 0.2 percent. The more favorable performance was probably followed by a rebound in September after the significant industrial decline in August. This could have dampened the entire quarterly industrial contraction.”

The expert said: “As expected, on the production side, services were the driving force behind the economy, while industry and agriculture were the drag on development. On the consumption side, household consumption could have been the driving force.” He added: “However, this is only a first estimate for now; detailed data released later will provide a more accurate picture of the economy’s performance in the third quarter.”

Annual growth was 0.3 percent in the first nine months of the year. Dávid Németh expects that the economy may recover in the last quarter, and thus GDP may increase by 0.5 percent in 2025 compared to 2024. Next year, however, we can expect faster growth, slightly above 2 percent, based on the current outlook. Household consumption may continue to be the engine of growth, while government stimulus may contribute to the acceleration, and the decline in investments that has been going on for years may also stop.