The European Commission has raised its projection for GDP growth in Hungary this year to 7.4%, up from its July projection of 6.3%. The EC projects a 5.4% growth rate for 2022, slowing to 3.2% in 2023 as output returns close to its potential and monetary support is gradually withdrawn. Last week, Hungary’s finance ministry lowered its projection for GDP growth this year to 6.8% from 7-7.5% against the backdrop of higher energy prices, inflationary pressure and the impact of the fourth wave of the pandemic.
The commission said rising production costs were keeping inflation high. It expects the harmonised consumer price index to peak at 6.7% in the fourth quarter of 2021 on the back of price hikes after the reopening of the economy and global commodity price increases.