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Strong Growth Outlook for Hungarian Economy by Sven R. Larson

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Strong Growth Outlook for Hungarian Economy

The Budapest Business Journal reports that the Hungarian economy is predicted to grow strongly in 2022:

Hungary’s economy could expand by 4-5% this year, CIB Bank chief analyst Mariann Trippon said at a press conference on Wednesday … the outlook is characterized by “greater than usual uncertainty” against the backdrop of the war in Ukraine.

Trippon also foresees domestic consumption to be a “main engine” in the economy. 

The BBJ also quotes Trippon as predicting Hungarian inflation to top out at 11% later in the year, with central-bank interest rates in the 7.5-8.5% bracket.

According to Eurostat, in April the Hungarian inflation rate stood at 9.6%, one percentage point above March. This rate exceeds the 8.1% average for the EU, but it is below nine other member states who have double-digit inflation. 

Hungary has built a record of strong growth. In 2014-2019, the Hungarian gross domestic product, GDP, expanded by more than 4% per year, adjusted for inflation. This put Hungary in the exclusive club of only six EU member states with 4%+ real GDP growth.

While maintaining strong GDP growth numbers, Hungary has also consistently had a low rate of unemployment. In 2015-2019, an average rate of 4.5% unemployed ranked Hungary 4th in the EU, after the Czech Republic (3/2%), Germany (3.6%), and Malta (4.3%). During the pandemic in 2020 and 2021, the Hungarian unemployment rate fell to 4.1%, the 5th lowest rate in the EU.

Sven R. Larson is a political economist and author. He received a Ph.D. in Economics from Roskilde University, Denmark. Originally from Sweden, he lives in America where for the past 16 years he has worked in politics and public policy. He has written several books, including Democracy or Socialism: The Fateful Question for America in 2024.