Erste has published an economic forecast for Hungary, predicting a 2% economic growth in 2026 following another year of stagnation in 2025. According to analysts, this growth will be primarily driven by improved external demand, supported by the trade agreement between the EU and the US, as well as the recovery of the German economy.

Impact of External Factors and Domestic Demand

The forecast emphasizes that external factors are expected to be the main drivers for Hungarian exports and investments. However, Erste experts note that ongoing uncertainty and weak secondary effects continue to restrain overall growth prospects. Household consumption is projected to remain a positive factor, supported by rising real wages and fiscal stimulus measures ahead of the elections.

Inflation and Price Trends

Hungary is showing signs of declining inflation: falling producer prices and a strengthening forint have helped ease price pressures. Additionally, price cap measures have had a noticeable disinflationary effect. Nevertheless, core inflationary pressure remains high, as evidenced by persistent inflation in the market services sector and elevated inflation expectations.

Monetary Policy and the Forint Exchange Rate

The National Bank of Hungary is maintaining a stability-oriented policy, despite policy easing by major central banks. According to Erste, interest rate cuts are likely only towards the end of 2026, as the regulator is focused on sustainable disinflation through positive real rates and supporting a strong forint. The stability of the national currency has become a key priority, given the significant impact of exchange rate fluctuations on consumer prices.

Fiscal Risks and Yields

The forint, which strengthened in 2025, is expected to remain stable in 2026 thanks to positive yield dynamics. Ahead of the parliamentary elections, Erste notes an increase in short-term fiscal risks, reflected in higher yields and wider spreads. At the same time, long-term yields are likely to stay elevated due to high base bond yields and ongoing uncertainty regarding fiscal consolidation.