Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Resuming the trends observed in recent years, Hungary's GDP rebounded sharply after the softening of the COVID-19 pandemic. Hungary’s economy maintained strong momentum in the first half of 2022, driven mainly by domestic demand; but showed signs of pressure towards the end of the year as high energy prices and the slowdown of partner economies impacted household disposable income. Overall, the IMF estimated GDP growth at 5.7% over the year, whereas growth will be restrained in 2023 (1.8%) amid weaker external demand, lower investment and an eroded household income. As inflation pressures fade and the global situation normalizes, the Hungarian economy is expected to pick up again to 2.8% in 2024 (IMF).

The country’ public finances have been affected by COVID-related measures first and then by increased spending in response to high energy prices, therefore the public budget deficit stood at 6% of GDP in 2022 despite robust revenue growth. The deficit is expected to narrow to 3.6% in 2023 (driven by additional windfall profits and sectoral tax revenues) and to 3% the following year. The total net budgetary cost of measures to mitigate the impact of high energy prices is estimated at 0.9% of GDP in 2022, 2.5% in 2023 and 1.8% in 2024 (EU Commission). The public debt-to-GDP ratio stood at 74.8% last year and is expected to follow a downward trend over the forecast horizon (73.7% and 71.9% in 2023 and 2024, respectively – IMF), although sharply worsening financing conditions are projected to increase the debt-servicing costs substantially (reaching 3.4% of GDP by 2024). Inflation was extremely high in 2022, reaching 13.9% as it was driven not only by high energy prices but also by domestic inflationary pressure and currency depreciation (resulting in the highest non-energy inflation in the EU). Despite the tightening of monetary conditions by the Central Bank, inflation is set to remain high in 2023 (13.3%), before easing to 5.6% in 2024 (IMF).

Employment reached its pre-pandemic level already in the first half of 2021, and the labour market was robust also during 2022 when the unemployment rate fell to 3.4%. However, the economic slowdown will have repercussions on job creation, contributing to slower wage growth and higher unemployment (3.8% in 2023 – IMF), although the rise in unemployment will be limited by the shortages of skilled workers. Overall, GDP per capita in Hungary was estimated at USD 42,132 in 2022, still below the EU average (USD 53,960 – IMF).

Foreign Trade

Hungary's economy is very open, with trade accounting for about 163% of GDP (World Bank, latest data available). Cars and the spare parts industry account for the highest share of exports and imports, followed by electric accumulators, telephones and monitors. Among the main imports, there are automotive parts, telephones, electrical energy and petroleum gas (Comtrade).

The European Union is by far the largest economic partner of Hungary, with Germany being the main trading partner for both imports and exports ( 23.8% of imports, 26.7% of exports). Italy is the second top destination for Hungarian goods (5.9%), followed by Romania (5.3%), Slovakia (5.1%), and Austria (4.5%). China is the second supplier of goods to Hungary (7.1%), followed by Austria (6.1%), Slovakia (5.9%), and Poland (5.7% - data by Comtrade).
 
Hungary's trade balance, which was traditionally in deficit, started posting surpluses in the last decade owing in particular to the good performance of the German economy. In 2021, the country’s trade balance was estimated at 0.3% of GDP by the World Bank (from 1.9% one year earlier). In the same year, exports of goods stood at USD 141.9 billion, roughly at the same level as imports (+17.9% and +23% year-on-year, respectively). As per services, exports reached USD 26 billion (+17.3%) against USD 20.2 billion in imports (+14.6%). The latest data published by the Central Statistical Office (KSH) shows that in January-September 2022, the value of exports amounted to EUR 20.5 billion and that of imports to EUR 14.2 billion. Compared to the same period in 2021, the value of exports increased by 27% and that of imports by 21%.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Hungary, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.