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Hungary’s economy is projected to avoid a recession in 2023, and return to steep growth next year, despite the protracted war in Ukraine and the European Union’s sanctions on Russia, the finance ministry said on Tuesday. The economy’s foundations are robust, with one of the lowest unemployment rates in the EU and the number of jobholders stable around 4.7 million. The country’s investment rate and export performance remain high, the statement said. Although Hungary is yet to receive the funding “it is entitled to” from the EU’s Resilience and Recovery Facility (RRF), its economic performance is 4 percentage points above the level it was before the coronavirus pandemic, while the EU average hovers around 3 percentage points higher, it said.
Economic growth was 7.2% in 2021 and 4.3% in 2022, despite the challenges Hungary faced in a “dangerous international environment,” the statement said. The protracted Ukraine-Russia war and the related EU sanctions continue to weigh on the international environment in 2023. “Had Hungary been able to use the recovery funding it is entitled to, economic growth would have been above 5%. By withholding the funds, the European Commission hobbled our economic performance and competitiveness,” it said. GDP edged down by 0.2% in the first quarter, compared with Q4 2022, and by an annual 0.9%. However, the economy is expected to expand again in the subsequent quarters, the ministry said. According to forecasts by the EC and the International Monetary Fund, Hungary will avoid recession in 2023, it said. Government measures to improve the balance indicators will ensure the country’s security, protect families, pensions, jobs and maintain the utility price caps, the statement said.