Hungary could face a severe economic shock as the global energy crisis intensifies, according to a Hungarian Institute of International Affairs (HIIA) analysis. The author, HIIA senior research fellow Philip Pilkington suggests inflation may accelerate and the forint could come under significant pressure in the coming months.
The crisis has been driven by disruptions to global energy supplies following the closure of the Strait of Hormuz, which has affected key flows of oil, gas and other resources. Analysts warn that even if the route reopens soon, the prolonged disruption has already created shortages that are likely to push up prices worldwide.
According to modelling based on previous energy shocks, Hungary is particularly vulnerable to rising energy costs. Inflation, currently around 2.1%, could surge to between 34% and 59% by mid-2027. This would exceed the previous peak of 26% recorded in January 2023 during the last energy crisis.
The forint is also expected to weaken sharply. Estimates suggest the currency could fall by between 17% and 31% against the euro, compared to a decline of around 15% during the 2022 crisis. The exchange rate is typically affected more quickly than inflation, amplifying the immediate impact on the economy.
Rising energy prices are likely to force government intervention. Previous measures included significant spending on utility subsidies, and similar policies may be required again, potentially pushing the budget deficit to historically high levels.
