Hungary's GDP growth is projected to surpass 3% in the second half of 2025, according to National Economy Minister Márton Nagy, speaking at a press conference in Budapest on Monday.
Nagy stated that the ministry forecasts GDP growth of 2.5% for 2025 and 4.1% for 2026. Additionally, the ministry expects growth to reach 3.9% in 2027 and 4.1% in 2028, as reported by news agency MTI.
Furthermore, the Economy Minister pointed out that the forecasts were roughly in the middle of the National Bank of Hungary's latest projection ranges. He said GDP growth this year would be driven by increased consumption, supported by real wage growth, a cap on markups for certain food products, higher tax allowances, and a personal income tax (PIT) exemption for mothers of three.
He also noted that retail sales growth was currently at 4-5% and could rise to 5-10% in the second half of the year.
Moreover, he also stated that major investments set to begin production in the near future would make a significant contribution to GDP growth. Additionally, he mentioned that a reform of Germany's “debt brake” could boost the country's GDP by nearly one percentage point, presenting a “great opportunity” for Hungary. Budapest Business Journal reports.
Nagy also indicated that inflation would temporarily rise to 4.5% in 2025 but could drop to 3.6% in 2026, eventually reaching the central bank’s 3% target by 2027. He also highlighted “unjustified” price hikes in food, banking, and telecommunications services, underscoring that the government would take all necessary steps to protect households.
In addition, he also said that prices for 884 out of around a thousand basic food products, which were subject to a mandatory markup cap, had decreased by an average of 18.1%.
He estimated food price inflation at around 7% in March and 5% in April.
Furthermore, Nagy stated that the government was “moving in the direction” of capping retail bank account fees at their end-2024 levels.
He also added that discussions with telecom companies regarding voluntary price limits were ongoing. Despite the government eliminating a telecom tax, he noted that the prices of telecommunications services had risen to an “unacceptable” extent, increasing by 15.6% year-on-year in February, with TV, internet, and telephone services seeing a 19.6% hike.
He stated that telecom companies are likely to be given a week to prepare for the implementation of new tariffs.
Nagy also commented that average wage growth in Hungary could stay above 8% from 2025 to 2029. He also highlighted that work on drafting the 2026 budget had begun, and the bill could be approved by lawmakers in the summer.