Hungary’s GDP in the third quarter of 2024 contracted by 0.7 percent year-on-year after adjustments for calendar effects, according to data released by the Central Statistics Office (KSH) Wednesday.
On a quarterly basis, GDP also declined by 0.7 percent, adjusted for both seasonal and calendar effects.
The economy has shrunk for two consecutive quarters, a sharper decline than anticipated. This also marks a return to recessionary conditions last seen during the energy crisis in late 2022. Over the past nine quarters, the economy has only managed to expand in three, while contracting in the remaining six, highlighting ongoing economic challenges.
Portfolio, the leading local business portal, said the recent GDP figures were much weaker than expected, partly due to the weak demand in export markets, the cooling of a recent investment boom and ongoing fiscal adjustments.
Furthermore, disruptions in European Union funding, persistently high interest rates tied to economic vulnerabilities, and cautious consumer spending are weighing heavily on growth prospects, creating a challenging business environment.
Following the disappointing GDP report, the Hungarian forint weakened on Wednesday, dropping to a two-year low of 406.44 per euro. Despite current economic headwinds, the Hungarian government forecasts a recovery with GDP growth projected to reach 3.4 percent in 2025. KSH is set to publish its second reading of third-quarter GDP data on Dec. 3.