Analysts at Morgan Stanley in London had predicted that Hungary’s gross domestic product (GDP) would rise 16 percent in Q2 compared to the same quarter last year; it ended up increasing 17.9 percent.
The economists now expect GDP growth of 7 percent in 2021, well above the expectation of 6.1 percent. This is based on the stronger-than-expected GDP growth in the second quarter and continued favorable growth prospects.
The experts emphasized that their new forecast significantly exceeded the forecast of the Hungarian National Bank (MNB), as the MNB currently expects 6.2 percent growth for 2021.
However, Morgan Stanley’s forecast for 2022 is 3.6 percent, mainly due to the higher base this year, but also because the company expects the Hungarian economy to grow closer to its pre-epidemic level.
The analysts expect further monetary tightening by the MNB in the coming months; their current forecast is for the Hungarian central bank’s base rate to peak at 2.10 percent in the current tightening cycle.
Other large players in London have also called for strong 2021 growth for Hungary in their latest forecasts.
The credit rating division of Standard & Poor’s global financial services group (S&P Global Ratings) reaffirmed its BBB / A-2 investment grade rating of Hungary’s long-term and short-term government debt with an unchanged stable outlook. They expect real growth in the Hungarian economy to reach 6.1 percent in 2021, assuming that the number of coronavirus cases does not start to rise rapidly again.
Fitch Ratings also recently reaffirmed its BBB stable outlook rating for Hungary’s long-term government debt denominated in foreign currency, stating that it expects Hungary’s GDP to grow by 6.5 percent in 2021 and 4.8 percent annually in real terms for 2022–2023.