Hungary: Growth outlook getting brighter – ING

ING economists Peter Virovacz and Frantisek Taborsky turn more optimistic on Hungary’s growth outlook, noting positive surprises in high-frequency data and stronger consumption. They still project 1.5% GDP growth in 2026 but now see clear upside risks. Industry and retail are recovering, though net exports and demographics may constrain expansion, while the Finance Ministry expects 1.6–2.0% GDP growth.

GDP forecast with upside risks

"Our latest GDP forecast projects a 1.5% increase in 2026. However, this generally gloomy outlook is now accompanied by a clear upside risk, given the latest positive surprises in high-frequency economic activity data. Consumption is expected to drive Hungarian growth this year."

"Although the surge in new export capacity could substantially improve the industrial outlook, current data does not suggest a broad-based recovery. Hungarian industry could achieve an average growth rate of around 4% in 2026. In other words, after three years of industrial recession, the sector could contribute positively to the overall performance of the Hungarian economy once again."

"Consumer confidence is approaching historical highs, with persistently low inflation and strong wage growth providing a favourable foundation for sustained growth in the retail sector, and consequently in consumption. We anticipate retail sales growth of around 5-6%, so household consumption will remain the main driver of the economy in 2026."

"In the absence of any demographic shift, a significant proportion of companies are likely to continue to hoard labour, keeping the market tight. As the end of the year approaches, the issue of next year's wages is becoming increasingly pressing. The three-year minimum wage agreement is entering its final year in 2027 and will certainly need to be revised."

"Regarding the balance of payments, we see the current account turning negative in 2026 following an improvement driven by export capacity in the years ahead."