In Hungary we focus on:
select areas where transition gaps remain and where the Bank can be additional, including in the efforts to overcome the impact of Covid-19.
developing capital markets and on opportunities to deploy equity and innovative investment products, and where appropriate seek to address inclusion and governance issues.
supporting projects in the areas of resource and energy efficiency, decarbonisation and renewable energy. The Bank will continue to pursue cooperation with the
authorities, including with the Ministry of Innovation & Technology on energy efficiency and the National Bank on green bonds and other green financial products.
Hungary's policy response to the coronavirus crisis
The EBRD is monitoring Hungary's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.
Current EBRD forecast for Hungary’s real GDP growth in 2022: 3.5%
Current EBRD forecast for Hungary’s real GDP growth in 2023: 3.5%
The Hungarian economy grew strongly in 2021 by 7.1 per cent, supported by private consumption growth of 7.1 per cent year-on-year in the fourth quarter of 2021, higher than in most peer countries. Industry production has been recovering since September 2021, despite supply-chain disruptions. Automotive industry output in February 2022 exceeded levels in the second half of 2021, with a significant increase in production of electric-car batteries. The labour market remains strong, with the employment rate exceeding pre-pandemic levels. While the high inflow of Ukrainian refugees could partially alleviate labour force shortages, especially in the manufacturing sector, the inflation rate, which was already 8.4 per cent in February 2022, is set to grow further amid surging energy and food prices.
Since mid-2021, the central bank has raised its main policy rate nine times, from 0.9 per cent to 4.4 per cent by March 2022. In 2022, the government has introduced temporary price caps for basic food products and fuel, while stimulating consumption with a one-off tax rebate and limiting retail mortgage interest rates. In addition, the war on Ukraine could likely further negatively influence trade and raw materials supplies, which would harm manufacturing industry. Hungary is highly reliant on gas imports from Russia, and increased energy prices could therefore have a significant negative effect on export-orientated and energy-intensive industries, such as the automotive sector. These are the main risks to our baseline GDP growth forecasts of 3.5 per cent in 2022, and 3.5 per cent in 2023.