According to the latest forecast of the Századvég Konjunktúrakutató Zrt., the performance of the Hungarian economy may expand by 6.6 percent this year, 5.3 percent next year, and 4.8 percent in 2023.

The volume of household consumption expenditures may increase by 3.3 percent in 2021, 7.4 percent in 2022, and 3.7 percent in 2023. The base effect will play a big role in growth next year (restrictive measures like the one in spring are no longer expected), high employment, the expected significant increase in real wages - supported by the labor shortage and a strong increase in the minimum wage in addition to the reduction of taxes on labor - and to significant government transfers (e.g. tax refunds for families).

Although the government has postponed some of the investments due to the reduction of the budget deficit and the capacity limit of the construction industry, the start of the new EU budget cycle and the growing willingness of businesses to invest may stimulate the volume of investments - 8.8 this year, 6.4 next year, in 2023 and by 7.5 percent. The investment rate can therefore remain high for a long time - and the investments of enterprises can later bring improvements on the export side.

At the same time, net exports will only be able to positively influence growth again from 2023: while its effect on growth was still positive in the first half of this year, this effect became negative from the third quarter due to strong internal demand and difficulties in the manufacturing industry. With the recovery of supply chains and international tourism, we expect a positive contribution to growth in 2023.

In the recent period, inflation rose above 7 percent. This was largely due to international factors (increasing oil prices, energy prices, disruption of supply chains), while to a lesser extent domestic factors (strong demand, weak HUF exchange rate, increase in excise duty on tobacco products). The rate of monetary deterioration may slowly moderate in the following period: after 5.1 percent in 2021, it is expected to amount to 5.3 percent in 2022, and then may slow down to 3.7 percent in 2023.

the detailed analysis in Magyar Hírlap .

Featured image: Századvég Konjunktúrakutató Zrt.