NGM: domestic economic processes are developing favorably, industrial performance is held back by weak external demand

As quoted, based on data from the Central Statistical Office (KSH), the volume of industrial production in February 2025 decreased by 8 percent compared to the same period of the previous year, adjusted for calendar effects, and decreased by nearly 1.3 percent compared to the previous month.

The NGM emphasized that the development of Hungarian industrial production continues to be influenced by weak external demand. The competitiveness problems of the European Union and the two-year recession in Germany – our country’s most important economic partner – are holding back Hungarian exports and industrial output. The negative effects through supply chains particularly affect the automotive and mechanical engineering industries.

Favorable processes can be identified in the domestic economy, which contribute to the revival of internal demand: real wages have been rising for 17 months, consumption is expanding, and all signs point to tourism achieving another record year in 2025 after 2024. Employment remains outstanding with nearly 4.7 million people working, while the number of registered job seekers is at a record low.

The new and used car market is picking up, the number of housing market transactions is growing dynamically, retail lending is also booming, while the volume of construction production increased for the fourth month in January 2025, the NGM listed.

The government is committed to supporting Hungarian industry and SMEs. As recalled, the Sándor Demján Program, implemented within the framework of the New Economic Policy Action Plan, consisting of 21 measures, provides 1,400 billion forints of resources for domestic SMEs in order to increase their productivity and facilitate their growth.