OTP Bank: there is no recession in the world despite the US tariff war

By: Trademagazin Date: 2026. 01. 20. 12:40

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The macroeconomic situation is favorable, there is no recession in the world, despite the American tariff war; and the European economy is “performing honestly in this huge headwind,” said Gergely Tardos, head of OTP Bank’s Analysis Center, in a background discussion on Tuesday in Budapest.

He added: the American economy is expanding vigorously, net exports are also supporting growth, expectations also point to the fact that 2 percent growth is possible, and the risks are on the upside. Consumption is supported by wage dynamics of around 3.5-4 percent. The tariffs have increased inflation to a lesser extent than expected. This year, two more interest rate cuts are expected in the United States, where the new central bank chairman is arriving, and the dollar may weaken this year as a result of the more lenient interest rate policy, he explained.

He mentioned that the European economy outperformed last year despite difficult circumstances – tariff war, energy crisis – and remained on a slow growth path. Economic growth has been maintained, and confidence indicators are slowly improving. This is where the German and European fiscal stimulus comes in, which “can keep the European economy on track” this year.

– he explained.

He said about the Hungarian economy: this year, growth of 2-2.5 percent is possible, the driving force of the starting growth will be the start-up of the German economy. In addition, the significant budgetary impulse will pull consumption. The decline in the investment rate was already more moderate in the last quarter of last year, and public investments will pick up this year, along with private investments. This year, the central bank has the opportunity to cut interest rates, the first of which is expected in the first quarter, according to Gergely Tardos, if the price increase at the beginning of the year remains moderate and the underlying inflationary processes develop favorably. This year, OTP Bank experts consider two interest rate cuts likely.

From the current level, OTP Bank analysts do not expect any further significant strengthening of the forint, but the euro may remain around the current exchange rate in the first quarter of 2026. According to them, after the significant strengthening of recent months, the forint may still be undervalued by 3-4 percent, and the real euro exchange rate would be around 370-375. A significant weakening of the forint is not expected, as the significant interest rate differential continues to support the forint, he explained.

Dávid Sándor, head of the Multi-Asset analysis department at OTP Global Markets, highlighted:

stock markets must be prepared for increased volatility in the coming period. The US stock markets may continue to be driven by semiconductor manufacturers and technology companies with their investments in artificial intelligence and cybersecurity.

In Europe, the beginning of fiscal easing and increased defense spending may give new impetus to the markets, calling the segment of smaller-capitalization companies favorable.

Central and Eastern Europe is still considered one of the cheapest stock markets globally, with regional stocks potentially rising by as much as 10-20 percent from current levels. The picture is different for raw materials: among industrial metals, the outlook for copper, uranium and gold remains favorable, but waiting may be justified in the oil market, said Dávid Sándor.