Looking ahead, weak business and consumer confidence are still the main constraints on the Hungarian economy. This confidence reached historic highs in the years leading up to the polycrisis (2018–2019). Unpredictable external factors such as geopolitics and tariffs, as well as uncertain global and local growth prospects, are holding back investment activity. Contrary to what would be expected in a macroeconomic textbook, high inflation and elevated inflation expectations are encouraging Hungarian households to save rather than consume. Although government interventions are directly boosting economic growth via government consumption and social transfers, they have yet to lead to a lasting turnaround in business and consumer confidence.
The biggest surprise in the detailed GDP data was the stronger-than-expected growth in actual final consumption, which now makes a bigger contribution to economic activity. However, the side effect is a stronger increase in import demand. Consequently, we have shifted to a less balanced growth outlook. While we have kept the 0.7% GDP growth forecast for 2025 unchanged, this comes with a significant negative contribution from net exports. The Hungarian economy still lacks external demand, with no quick change in sight. Rising consumption is putting pressure on the import channel. Furthermore, the one-off rise in exports due to tariff threats has now been reversed, resulting in a significant increase in imports, and consequently in inventories.
The volatility of the German economy and the uncertainty surrounding French domestic politics suggest that a rapid recovery is unlikely, and an upturn in external demand is not expected in the near future. Furthermore, the positive impact of the German investment programme and the increase in EU defence spending is not expected until 2026–2027. Against this backdrop, we anticipate a positive shift in the Hungarian economic outlook in the years ahead. As next year is an election year, we anticipate a significant increase in consumption, a gradual improvement in investment activity, and a negative statistical impact from shrinking inventories as the economic cycle turns. Exports will slowly pick up, but we do not expect a positive contribution from net exports until 2027.