Briefing notesEconomy & Policy

Hungarian economy expected to grow in 2021

Despite the economic difficulties caused by the coronavirus, the Hungarian economy is expected to grow next year.

An analyst at the research foundation Századvég, Gábor Regős, says Hungary’s economy will contract by almost 3 percent this year before picking up in 2021, with growth of 5 percent.

Századvég’s expert added that the second half of the year still holds a lot of uncertainty, as the economic recovery also depends on how foreign markets fare and whether the coronavirus epidemic continues or not.

“At the same time, Hungary’s situation is still more favorable than the European average, as its growth was significant even before the crisis, and it also managed the epidemic well,” he explained.

Regős called the reduction of the base rate on Tuesday a symbolic measure. In his opinion, the National Bank of Hungary has used a variety of monetary policy instruments in recent years, and changing the base rate is just a part of the current crisis management. “Suspension of loan repayments, the expansion of lending and the bond program will also make a significant contribution to the recovery,” he added.

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