MBH Bank: improving economic prospects, expanding investments, but temporarily rising inflation expected in 2025

Industrial investments starting up could give a boost to growth

The forecasts for the Hungarian economy for 2025 are more favorable compared to last year, which is primarily due to the recovery in domestic demand due to the expected increase in consumption. This year, investments are expected to stabilize, in connection with the fact that more than 1,400 billion forints of funds may be channeled into the economy through the Sándor Demján program in the form of preferential investment credit, leasing and capital programs, as well as partially non-refundable subsidies.

“The increase in real wages, the increase in family tax relief, payments and maturities on government securities, and the labor loan may all further increase internal demand, so that economic growth may reach up to 4 percent by the end of this year. However, we have revised our forecast for annual GDP growth to 2.6 percent due to the only slowly improving foreign market economy and the slower acceleration of large automotive industry investments,”

– said Zoltán Árokszállási, Director of the MBH Analysis Center.

An important development is that the chances of the Russian-Ukrainian war ending in the foreseeable future have recently increased. This could have a significant positive impact on economic growth through lower energy prices, improved investor sentiment, and thus a stabilization of the forint exchange rate.