K&H: Hungarian economy could grow by 2.5-3 percent next year

Accelerating growth expected in Hungary

Based on the current outlook, this year – similar to last year – growth of only 0.5 percent is expected, but next year an expansion of around 2.5-3 percent can be expected – said Dávid Németh, the chief analyst at K&H, who presented the financial institution’s latest forecast at a press conference in Budapest on Monday.

“The growth and inflation forecast is surrounded by significant uncertainty, as the geopolitical situation is very hectic. The Trump effect also makes it difficult to make an accurate forecast, in addition to the trade war, the armed conflict between Russia and Ukraine, and the Israeli attack on Iran – these are just a few factors that fundamentally affect the performance of the global and Hungarian economies,”

– said the expert.

How might prices develop?

K&H expects an average annual inflation of 4.3 percent for 2025.

“However, the big question here is how long the official price regulations will remain in force and whether there will be new ones. There are weather-related risks with food, and international market prices are showing significant increases in the case of certain agricultural products, such as cocoa beans. In addition, subsidies from the Hungarian budget, whether tax breaks or monetary contributions through domestic demand, may have an inflationary effect. For this reason, the consumer price index is stuck at the top of the central bank’s tolerance band of 3 percent, plus/minus 1 percentage point,”

said the chief analyst at K&H. According to him, the average annual inflation next year could be around 4 percent, but the outlook is also uncertain.