The projection is a fraction under the previous, 0.6% forecast published in February and well under the government's forecast for 1.5% GDP growth.
The EC noted that Hungary entered a technical recession in H2 2022 and said monthly indicators point to a further drop in Q1 2023.
The commission puts GDP growth for the whole European Union at 1% for this year.
The EC augurs a pickup in economic growth in Hungary to 2.8% in 2024 supported by lower energy prices and expected disinflation.
Downside risks to the growth outlook stem from a sudden increase in the country risk premium which might also constrain fiscal policy, and from the exposure of the economy to a potential spike in energy prices, the EC said.
The EC sees average annual inflation rising from 15.3% last year to 16.4% in 2023. It projects a sharp drop to 4% in 2024.
Upside risks to inflation are related to a potentially looser fiscal policy stance, high wage growth in a tight labor market, and the de-anchoring of inflation expectations, the EC said.
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