The Hungarian economy stagnated in the third quarter on a quarterly basis and showed only a slight increase compared to the same period of last year. Hungary’s gross domestic product volume was 0.6% higher in Q3 2025, both in raw data and in seasonally and calendar-adjusted and reconciled data, than in the corresponding period of the previous year.

In the first three quarters of the year, the economy’s performance was 0.3% higher according to raw figures and 0.2% higher according to seasonally and calendar-adjusted and reconciled data than in the same period of the previous year, fresh data released by the Central Statistical Office (KSH) reveals.

Even these anemic levels marked the strongest growth since the second quarter of 2024 and were primarily driven by the services sector, particularly the information and communication sectors. However, the upturn was partially offset by the slowdown in the added value of industry and agriculture.

In its commentary, the Ministry of National Economy (NGM) highlighted that “the prolonged war in our neighbor, the EU’s extremely unfavorable customs agreement, and Brussels’ pro-war policy are hindering economic growth.”

Analysts had previously predicted a zero percent change in GDP on a quarterly basis and a 0.9% annual expansion, based on the economic portal portfolio.hu’s data. However, it should be noted that their forecasts showed a relatively large variance: between -0.5 and +0.5% on a quarterly basis, and between 0.3 and 1.4% annually.

According to ING senior analyst Péter Virovácz, the Hungarian economy’s performance is hardly encouraging. The latest data indicates that the Hungarian economy is still unable to break out of the years-long stagnation, he says. One better period is followed by a worse one; in other words, the sideways trend is continuing.

Disappointing Performance

Compared to the expectations outlined at the end of last year, and even compared to what was predicted at the beginning of this year, the performance is disappointing. Based on the raw data, the three quarters so far have brought little growth: based on the adjusted data, the expansion is only 0.2%.

As for the individual sub-areas, the weather has not been kind to agriculture this year (including late spring frosts followed by a drought in the summer). In addition to crop production, animal husbandry is also having a bad year; the sector has suffered from outbreaks of both bird flu and foot-and-mouth disease.

Elsewhere, industry is still being held back by the lack of external demand and the failure of the expected turnaround in the inventory cycle. Thus, only the service sector continues to appear positive. Within this, the performance of the information and communication branch is dominant.

Dávid Németh, a senior analyst at K&H, said that the latest data was essentially in line with market expectations, although, as he explains, “We expected a slightly weaker result, with a quarterly decline of 0.2%.”

According to János Nagy, a macroeconomic analyst at Erste Bank Hungary Zrt., the data was not surprising, although it is important to note that the details will be made public only much later, on Tuesday, Dec. 2.

He also noted that the sectoral commentary of the KSH for Q3 is almost identical word-for-word to that announced in the first estimate of the Q2 data. Based on this, the trend typical of previous quarters (under which the production sectors are pulling back their performance, which is more or less offset by services) has not changed significantly. In July-September, the construction industry also performed more weakly compared to the previous quarter.

Downward Revision

As for the near future, in light of the third-quarter data, ING Bank has revised its 2025 growth forecast downwards. Some surprisingly large-scale momentum would be needed in the final quarter for overall 2025 growth to exceed the 2024 level of 0.6%. There are no real signs of this yet, according to Virovácz of ING Bank.

Erste has also revised its current growth forecast of 0.5% for this year downwards by a few tenths of a percentage point.

K&H is slightly more optimistic and expects the economy to recover in the last quarter. Should that materialize, GDP could grow by 0.5% in 2025 compared to 2024.

Meanwhile, the October inflation data has arrived, showing that consumer prices are still stuck at their July level of 4.3%. Food inflation has fallen to its lowest level in a year, but in other sectors where the government has tried to intervene in prices, the increase was still significant.

The annual indicator is, therefore, still far from the central bank’s target range of 2-4%. According to Virovácz, despite the Hungarian economy having been stagnating for three years and the government having introduced several measures to curb inflation, Hungary is still struggling with price stability. Annual core inflation has risen above 4% again, to 4.2%.

“We can now safely say that food inflation will remain permanently below 5%. This is significant because when the government representatives introduced the margin freeze, this value was specified as the condition for phasing out the measure,” said Tamás Kozák, secretary general of the National Trade Federation (OKSz).

According to the association, the margin freeze is as ineffective as it is harmful to traders, customers and the Hungarian economy. As the OKSz previously said, citing the Hungarian Competition Authority’s inspections, the price increases in late 2024 and early 2025 were not caused by retail margins, but by increases in supplier costs, such as labor, overheads and other fees.

Editor’s Note: For more analysis from Péter Virovácz, see “ING Sees a Slow Economic Pickup From 2026; Inflation, HUF Stability in Focus” on page eight.

This article was first published in the Budapest Business Journal print issue of November 14, 2025.