Hungary's medium-term macroeconomic performance in a regional comparison
letöltésOblath, Gábor; Palócz, Éva
Hungary's medium-term macroeconomic performance in a regional comparison
Our study examines Hungary’s macroeconomic performance and balance indicators in an international comparison for the period between 2020 and 2023, while also assessing how recent developments compare to trends observed in the 2010s. Identifying the distinctive features of the past few years is complicated by the fact that the 2020s have been characterized by an unusual degree of macroeconomic instability, exacerbated by excessive government overspending, frequent miscalculations in budgetary planning, and overall fiscal unpredictability.
Each year within the period had its own defining economic challenges: 2020 was marked by the recession induced by the COVID-19 pandemic, 2021 saw a sharp economic rebound, 2022 experienced a severe external balance deterioration and soaring inflation due to pre-election overspending, while 2023 was dominated by a drastic decline in domestic consumption, leading to an economic downturn and an unprecedented correction in external imbalances. The instability of the Hungarian economy manifested in several negative European records, including the highest inflation rate, the largest relative government interest expenditure, and the sharpest decline in domestic demand in 2023. As a consequence, the anticipated economic recovery in 2024 failed to materialize.