Márton Nagy: inflation may be in the single digits by the end of the year, the economy may pick up again next year

Márton Nagy called 2022 one of the most difficult years since the change of regime, adding that “we were able to adapt” and that “moving along the current path, we may even have some pleasant surprises”. Among the difficulties, he cited as an example the country’s annual energy import, which last year jumped to 10 percent of GDP from 4 percent the previous year due to rising energy prices, and represented an expenditure of 10 billion euros.

This year’s growth can be helped by subsidized loans worth 3,000 billion forints worth of 4 percent of GDP, such as the Széchenyi credit card program and the Gábor Baross reindustrialization loan program announced last week, he emphasized. He added that on the consumption side of GDP, exports and investment, on the production side, industry, tourism and agriculture may perform well, while this year residential consumption may pull back growth.

Regarding inflation, the minister emphasized that the introduction of the fuel price cap could push January inflation by 0.5 percentage points, over 25 percent, and food prices could also peak around February-March. From there, the annual growth rate of consumer prices may decrease drastically and by the end of the year it may be in the single digits again.