Experts for VG: there is less and less chance of growth this year

By: Trademagazin Date: 2023. 08. 16. 13:48

For the fourth consecutive quarter, Hungary’s GDP has declined, and the annual decline is worse than expected. Experts have indicated that there is a diminishing likelihood of growth in Hungary this year, potentially resulting in stagnation or even a slight contraction in 2023.

Peter Virovacz, the Chief Analyst at ING Bank, previously predicted a 0.4% expansion but now considers the government’s target of 1.5% GDP growth to be unrealistic. “We see a significant chance that the Hungarian economy will not achieve positive growth overall in 2023. This is despite the potential for better performance in the second half of the year,” he stated, adding that the first-half downturn appears too deep to recover from quickly.

Marianne Trippon, Chief Analyst at CIB Bank, noted that their initial full-year growth forecast was 0.2%, but in light of the data, they might need to adjust it downward. She believes a strong rebound in the second half of the year is required to maintain positive annual growth, but doubts remain regarding this scenario.

She suggests that a contraction between 0.2% and 0.4% seems more realistic now. For next year, they continue to anticipate GDP growth exceeding 3%, with an official projection of 3.2%, subject to adjustment based on detailed numbers.

Gergely Suppan, Chief Analyst at Magyar Bankholding, believes that after a notably weak first half, a turnaround is expected in the second half, supported by a steep decline in energy prices and the expiration of high fixed-price annual contracts. He suggests that due to the underperformance in the first half of the year, their 2023 GDP forecast of 1% growth could be downgraded closer to stagnation. The extent of this will be significantly influenced by the detailed GDP figures expected to be released in early September.