The decline of around 7 per cent this year and deteriorating equilibria will be followed by a relatively slow correction next year

In mid-March 2020, GKI outlined two scenarios with a GDP fall of 3 per cent and 7 per cent, respectively in its forecast for 2020. At that time, even the first scenario was a very pessimistic prognosis. In June, GKI ruled out the possibility of a 3 per cent recession and set the expected rate of decline in the 5-7 per cent range. Owing to another wave of the pandemic, GKI now, in September 2020, considers only the -7 per cent forecast to be viable, adding that not only a better but also a worse situation may develop. After a 6.1 per cent decline of GDP in the first half of the year (and a 13.6 per cent in the second quarter), GKI expects a contraction of around 8 per cent in the second half of 2020. The rate of GDP decrease may have reached around 7 per cent in the third quarter (when the impact of the pandemic was smaller) and around 9 per cent is projected in the fourth quarter, based on available limited data and the GKI economic sentiment index. GKI still expects a 4.5 per cent recovery in 2021, with high uncertainties, and assumes that growth will only start in the second quarter compared to the same period last year. The Hungarian economy will probably reach the GDP level of 2019 only in 2022. The change in Hungary’s GDP is expected to be slightly more favourable than the EU average; however, in a regional comparison it will be only weak-medium.

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The archive of earlier forecasts is available here.