Analysis by Region - Emerging Markets - Hungary

Analysis by Region - Emerging Markets - Hungary

We continue to expect a 0.5% GDP contraction in Hungary this year, improving to a 2.6% rebound in 2024. Available high-frequency data for Q1 support our below-consensus view that the economy contracted 1% y/y as industrial output shrank, consumers kept limiting purchases, and some public investments were scrapped to curb the deficit. At the same time, the forint has continued to appreciate since the start of this year, which will support disinflation and likely open the door to earlier policy rates cuts. This could boost the outlook for H2 2023.