MBH Bank: Growth may accelerate in the second half of the year, next year GDP may increase by 3.7 percent

MBH Bank analysts at the press event presenting the latest macroeconomic forecasts. Analysts continue to expect average annual inflation of 4.1 percent this year, while they forecast a 3.4 percent increase in consumer prices by 2025. Real wages have been increasing since September 2023, which may increasingly be reflected in consumption in the coming months, thus giving a boost to economic growth. According to the analysts, the forint may strengthen to the level of 382.5 by the end of the year, while it may be 385.6 against the euro on average for the year.

Analysts expect stable economic expansion in the long term

MBH Bank analysts forecast economic growth of 2.7 percent for the year 2024, modifying their previous forecast of 3.5 percent, while the rate of growth expected for the year 2025 was set at 3.7 percent. Contrary to preliminary expectations, the expansion of external demand started at a slower pace, and household consumption did not reach the expected level either. Despite this, the long-term outlook is unchanged, only shifted by about six months, so the trajectory of the domestic economy remains positive.

In the second half of the year, the recovery can predictably start, the driving force of which will primarily be consumption on the consumption side, while on the production side, industry, trade and the hospitality sector will play a decisive role. Compared to the analysts’ forecast for the previous quarter, a significant change is that the recovery of the industry is expected to be smaller. The reason for this is primarily the weakening of Hungary’s export markets, as a result of which the contribution of net exports to economic growth may be more modest. At the same time, the level of government investments may decrease, which thus keeps investments at a lower level.