Hungary’s GDP contracted and inflation increased in the second half of 2022, the European Commission said in its spring forecast. The EC forecast Hungary’s annual GDP growth to slow down from 4.6% in 2022 to 0.5% in 2023, and then pick up to 2.8% in 2024. “HICP inflation appears to have peaked at 25.9% in 2023-Q1, following the phase-out of the motor fuel price cap in December 2022,” the EC said. “The inflation rate is set to ease in the subsequent quarters, driven by base effects, lower commodity prices, the recent currency appreciation and weak consumer demand,” it added. The EC projected that the annual average inflation rate is to increase from 15.3% in 2022 to 16.4% in 2023, and then drop to 4.0% in 2024. The budget deficit remained high at 6.2% of GDP in 2022, and it is projected to decrease to 4.0% this year and to 1.5% in 2024, the EC said.